I don’t see how basing difficulty on ‘distance from the player’ is supposed to be less ‘artificial’ than basing it on time passed. It just means there isn’t any pressure, and without any pressure the game suddenly becomes a lot more grindy and a lot less rewarding than it otherwise could be.
Even a little bit of pressure, a slow buildup, means tension, it means risk. It gives the player a goal, even if they are on top - keep getting better, or you won’t be on top anymore and it ultimately gives the game an ‘end state’ where the player either transcends the growth in difficulty or is swallowed up by it.
What I’d like to see is an “optimal gameplay progression” that looks like this:
a0=2&a1=3x-x^2+.2&a2=4*(x-1.5)/2-(x-1.5)^2/3&a3=2*(x-2.5)-(x-2.5)^2+1.5&a4=1&a5=4&a6=1&a7=1&a8=1&a9=1&b0=500&b1=500&b2=-5&b3=5&b4=-5&b5=5&b6=10&b7=10&b8=5&b9=5&c0=3&c1=0&c2=1&c3=1&c4=1&c5=1&c6=1&c7=0&c8=0&c9=0&d0=1&d1=20&d2=20&d3=0&d4=0&d5=2.5&d6=1.5&d7=&d8=2.5&d9=&e0=&e1=&e2=&e3=&e4=14&e5=14&e6=13&e7=12&e8=0&e9=0&f0=0&f1=1&f2=1&f3=0&f4=0&f5=&f6=&f7=&f8=&f9=&g0=&g1=1&g2=1&g3=0&g4=0&g5=0&g6=Y&g7=ffffff&g8=a0b0c0&g9=6080a0&h0=1&z
(Load that here: http://rechneronline.de/function-graphs/ to see the result)
The blue line represents the player’s relative power and success, while the red line represents his lasting impact on the world (probably through supporting some sort of NPCs and building some level of structures).
So the game starts fairly difficult, but the player progresses steadily and accumulates power, becoming more capable of facing the challenges he’s encountering. At a certain point, however, his individual power isn’t growing as fast as the difficulty of the challenges, and his relative power starts falling. At this point, the optimal path is to accept the inevitable decrease in relative power and spend what you have in making investments - if you succeed, and overcome the difficult period long enough for those investments to start paying off, your power will increase again. OR you can choose to try to flatten the curve - but it means it will always be trending downwards.
Either way, your character should eventually begin to fail. At this point, it’s no longer about survival, it’s about leaving a legacy - while your individual relative power falls, the magnitude of your impact steadily increases. You are no longer playing so that you, yourself, can overcome any challenge in the apocalypse - you are playing to insure the survival of what you’ve accomplished and preserve the impact of what you’ve done.
Personally, I find that sort of approach far more interesting, far more fulfilling, than a traditional RPG inevitable and steady power creep.
Sure, in the end you might individually end up worse off than you were at the beginning, or even die - but if you’ve accomplished something, changed the world in some meaningful way, that is still a victory.
If you want the player to continually face new challenges and still be rewarded, without turning the game into an absurdist parody of itself with constantly elevating power levels, I think the best way to do that is make the rewards benefit someone or something other than your character.