Man, this is strange, just last night I had a discussion about this.
A regular who I've known for years (don't really like him, but have known him for forever) was watching us play at the hobbyshop, and he complained that my game was too easy, and wasn't a "good RPG". My players and I said hey, we're having a lot of fun, I don't care if this is the "right" way. (they had just DESTROYED a ton of skeletons and took almost no damage due to some brilliant tactics). He got really pricky about it and went on about how PC's shouldn't be able to win so easily. So I asked my players if they were having fun, and recieved a resounding yes. I then asked they guy if his players were having fun in his game.
He has no game. Hasn't for almost 4 years. I played in the last one he ran, and I can see why. Besides a bunch of other problems he has in his campaigns, he is a classic adversary DM. It's him vs. the party, and of course he'll win every time. No one likes that.
To the OP, I don't think you're quite an Adversary DM, but your pretty darn close. But I'd give your game a shot. A really tough game is, IMO just as fun as one of average difficulty. I just don't want to be making a new character every session.
The bottom line is, the only thing that matters is if everyone is having a good time. I think players would rather smite bad guys, get treasure and save the world than just running away or getting slaughtered all the time, but we all have different tastes. Whatever it is that you do, as long as the players are coming back with a smile on their face, you're doing it right.