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1. Challenge Mode is not any harder. You can set up your league to be significantly harder than the default of Challenge Mode.
2. I would be very interested in a seriously challenging Online League. I have been in a few, and regardless of the attempts to make it otherwise it becomes a game of who can tank best. Nothing is as frustrating to me as trying to win only to realize you will end up losing to guys who simply are NOT trying to win 3 out of every 10 seasons. That's why I enjoy Offline... at least I know each other AI team is putting the best team on the field their limited AI can.
Personally, I have a crap ton of house rules in place in my offline leagues and I still feel like I have a huge advantage so I get it. If you want to cheat the system in offline you can and no amount of house rules will prevent it.
At the end of the day it's a casual game that can be played offline or online in an almost unlimited number of ways. May as well ask how people can really enjoy playing with historical players? With Minors? With Scouting turned off? Different folks are going to like different things and this game can be played as a number of completely different experiences depending on what people are looking for,
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