Hard modes can indeed make a game more entertaining. However, I dislike it when hard mode is merely 'computer cheats' mode. I don't mind the computer getting some 'cheats' since artificial intelligence is just that, artificial. But at least 'improve' it for hardmode. If needed wait a few months and then release it as an 'update patch'(this way you can see unexpected ways to work the system used by players and incorporate an AI that does the same, and then some, it would still be an imitation, but likely a more challenging one than the default AI).

The Game Utawarerumono for example has a godly hard mode option. Not only do the enemies become progressively stronger and more numerous on the higher difficulties but they begin utilizing better strategy as well. Kinda annoying actually. . . I still haven't beaten it on the hardest mode. 1 mistake and it is pretty much game over! The computer really abuses any mistakes you make!