In most games mods are things that experienced users adopt to customize their games or to give themselves extra challenges. It's utterly backwards to make the base game difficult and to expect less experienced players to write modifications about mechanics that they don't understand well, or to have to research how to use them. Mods are very much a niche thing - in EU4, if I look at achievements, only a small minority of users have ever enabled ironman.
It's also emphatically not the case that the "easy" setting is an answer, as a single difficulty button mashes together a whole host of changes. The dispute is not "easy vs. hard", but rather is one between different game styles. A "normal" 1.1 game is not remotely the same beast as a "normal" 1.2 game. And the easy setting does serve an important and different function: it's a forgiving environment for people very new to the game. You want that to exist independent of judgement calls.
The hardcore players are also falling back on arguments that amount to "play my way or play large nations" - again, implying that the game should permit only restricted options for styles that differ from theirs. Again, this is a reversal of the normal way that games are designed and played - most of the effort and options go to where most of the people are. And, no matter what you think, EU4 is like every single other computer game ever written - the number of casual players is always higher than the number who focus on fancy tricks with obscure provinces. It's just less so than Minecraft or the like.
To be truthful, I think that EU4 would benefit if the hard and normal settings had actual gameplay differences and weren't just knobs turned towards or away from players. I'd find it really neat to have the game mechanics actually differ in substantive ways, and it'd encourage people to experiment.