Morkus from Orkus
And this is where it gets tricky, and where I wish the 5th edition wording was a little less vague. The DMG also uses the term "fair challenge", which can be be interpreted in various ways. And we certainly split a lot of hairs about that phrasing in a very long discussion over on the WotC forums. Does it mean fair, as in "reasonable", or fair as in "not unfair"?
A CR 3 creature may be a reasonable challenge to a group of three level 3 players, or it might be a cake walk when its a group of four or five players. Obviously the number of players, their equipment, and their class, has a dramatic effect on how hard an encounter is. And a CR can't possibly reflect that completely. What it can however indicate, is if under any of those combinations, the battle is likely to result in deaths. What if the group is made of only two players? What if they roll really badly on their saves? What if they accidentally get split up? According to the CR, that monster should still be reasonable under those conditions. I don't think that's useless information, and I don't think that's broken.
Well, the rules say it should be a worthy challenge for 4 like level characters. That means that more than 4 would make the fight easier and the DM should need to tweak the encounter to make it harder, and less than 4 should make it harder and the DM should tweak it the other way.
From reading this thread, it seems like a CR for 4 like level PCs is waaaaay too easy to be worthy or a challenge. The CR system seems to be really messed up, which isn't surprising. PC classes vary in ability vs. creatures with specific powers. When you throw in player ability, it's no wonder CR is so broken.
3.5 CR was broken and I had to basically know what the group could do and then look at what the monsters could do in order to gauge the challenge level of a specific creature. 5e looks to be the same, except that I will have to go much higher in CR in order to make a single encounter a challenge.