I'm surprised I didn't comment on this before.
I'm one of those people who like games to be difficult. I don't really feel satisfied unless the game provided at least a few difficult portions where I died a few times or really had to think/strategize/have good skills to get past. While I *usually* pick normal on a game I'm not sure about, I almost always go for the *hard* setting if it's a game I'm familiar with or am going through for a 2nd time.
Now, as to un-fair difficulty, that depends. As long as it's possible with some practice and strategy, I say it fits on a "hard" difficultly setting. Complaining about a game being hard on hard is like complaining that the extra hot jalapeno's you ordered are too hot. You asked for more, and you got it. If it's too much, back off a little, or raise your tolerance for it. Now, for ridiculously hard sections on easy or even normal settings, that may be unfair. Some people may just be playing through the game to enjoy it, or the story, or whatever, and if they're not accustomed to *punch in the gut* difficulty, it can be quite a rude awakening, as well as a turn-off to the game. No-one likes it when you're prancing along squishing slimes, then suddenly a dragon appears and crushes you like, well, a slime.
Point of this rant - sudden spikes in difficulty aren't fun, and I consider them unfair. At least ease players into the difficult section gradually. Unless it's a harder difficulty, and you're into painful challenges, like I am.
As for multiplayer, isn't challenge how you get better? If you really enjoy the game and want to be good at it, you'll keep playing and welcome challenge. Otherwise..you won't really play it much. Though I agree cheating is just right-out unfair.
@Arcadia - um, I'd say no. The game lets you do it, after all. The trade off is you may not be in a good position to whack volvagia when he pops out of a hole. I always just dodged on the area, never thought of that

.