Higher difficulty, more enemies would spawn.
It's too similar to "let's add a bazillion HP to that boss, this will make him hard to kill". More enemies =/= bigger challenge. Higher difficulty should mean smarter enemies, better tactics, stronger specialized units.
If this was implemented, spawn magnitude should be separate from the difficulty.
Personally, I don't care much about fighting, so I'm not keen on this idea. But if it's optional, sure, why not? As long as the engine can support it, which I doubt. Maybe the next console generation.