Game balance means different things to different people. To some Its the right mix of fun yet challenging gameplay, to others its having to accept a heaped tablespoon of Irritation with their fun.
Skyrim is a very topical example of how this can separate the 2 camps. If you know where to look and what loopholes to exploit, you can very easily max out certain skill trees, boost your income and become quite the wealthy death machine.
Now I must admit that I love that and i'm not alone. It's not that i don't like a challange, I do. For me finding these exploits is another way of beating the game. Forget firing arrows at every single fucking creature I see, i'll go get some free lessons of a Elf I know thanks.
Obviously though for others, these "cheats" defeat the whole purpose of the game. Oddly their sense of fairplay doesn't stop them from taking advantage of it themselves. They are compelled to ruthlessly boost their characters, then moan endlessly online about how it ruins their game -_-
Ok maybe my personal feelings are bleeding through there :) The fact that the dragons in Skyrim are relatively easy to dispatch, compared to a rank 50 mud crab is a open joke and one that many feel needs addressing.
But walking this line can tricky for many devs, balancing the more fun loving casual gamers needs against the core gamers desire for challenge. As Dark Souls has proven their is the market for punishing gameplay.
How big a market remains to be seen. I've not the masochist tendencies to play it myself, i'm off to make a few hundred leather braces in Skyrim ;)