alt Hacker Newsin games like wow where the more powerful you get the harder the enemies become, this reduces incentive to get more powerful. its a simple consequence so im not sure why they do it - probably to keep "time played" metric hovering at the desired level. which imho backfires when time played becomes 0.
You're only looking at one side. Dynamic difficulty also allows players to progress by lowering the health of a boss they've failed to beat for over two hours.
Casual players giving up was a problem that no amount of shaming managed to fix ("haha skill issue, sucks to suck").