Do you think that "modern gamers are easily frustrated" is used as an excuse to strip away genuinely interesting design elements because they are hard to balance/expensive?
Maybe. I don't know. It seems like a pretty goofy excuse to me. Frustration is a fundamental element of "real" games, with gamers pushing past the frustration to achieve a sense of triumph. As designers, our goal should always be to find the right balance point for our audience. If the argument is that the gaming audience is much larger and, therefore, less h4rdc0r3 because the pool has been diluted, okay, but it's still our job to find the right balance points and feature set for the audience and its different segments.
One of the reasons I really wanted to include Hardcore Mode in F:NV was because I recognized that there was a significant chunk of the audience that would likely want something a bit tougher than sliding HP and DAM values around. I don't think Hardcore Mode is "really" hard, but compared to the default mode, it does require more attention and a bit more care in combat.
I know there's a subset of that group that wants things even more brutal and survivalist-oriented, for whom even the JSawyer mod doesn't go far enough.
I don't think we should try to make everyone happy, but I do think that as developers we should recognize and try to appeal to the major "chunks" of our audience. With 5 million+ players, I don't think it's realistic to think one play still will fit all. And I don't think that saying, "Well, it's hard," absolves us of responsibility. We get paid pretty good money to figure out how people will play games. We should probably put some effort into actually understanding the audience and designing things that will work for them.