Ok, so let me just start off by saying this: I love the idea of a difficulty slider. That said, the current incarnation of the slider has some major issues. I'm going to outline those issues and then suggest solutions and improvements. Sorry if this is long, I can be long winded sometimes

TL;DR: The Difficulty slider is broken. Here's how to fix it

First, as we all know, the dual pistol wielding guys that can one-shot you. I'd chalk this up to a bug I guess but the problem goes a bit deeper than that. When going from Normal to Advanced, the difficulty doesn't always scale the same way. Everyone on Normal tends to be pretty easy, overall, with maybe a small number of areas that require a bit more strategy than going in with guns blazing. Advanced can be anywhere from Normal difficulty to "one shot and you are dead" difficulty. There isn't really any rhyme or reason to how hard a particular mission is going to be. I don't really play on Elite because I find that everything on-shots me on that skill level (and admittedly, I'm not the best player in the world

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Second, the slider itself. As we know, it's not really a slider. Ok, that's fine. However, I find myself getting more annoyed with how the mechanics of the slider work rather than the difficulty level itself. Here's a good example:
I went back to replay the Azura remastered mission and decided, hey, since this mission is going to scaled for Level 4 or whatever, and I'm currently a VA, why not turn the difficultly all the way up to Elite? Well, I forgot to do that before I accepted the mission so of course, once I got IN to the mission, it was set to Normal. No problem, I'll just warp out, drop the mission, set the slider, and get the mission again. No dice. I assume I needed to wait 20 minutes or whatever for it to "reset" but because I just went back in (despite having dropped and re-acquired the mission) the first section was still set to normal difficulty. Ok, fine.
So now the second section begins on Elite and that's fine. However, the insane difficulty ranges popped up again. A mission scaled for a Lt6ish on Elite was now almost impossible for a VA to finish. Seems a bit broken there *shrug*
Another example: I wanted to replay Cutting the Cord on Advanced because I felt like doing it on Normal was WAY too easy. So I beam to my ship, go to the bridge to grab the mission, change the difficulty... oh wait. For some reason, the drop down is disabled. Why would this be the case if I happen to be on my bridge? So I have to beam out (which is yet another loading screen), change the difficulty, go BACK to my bridge (more loading) just to change the skill level? That's not good.
Related to this, I've often wished that I could change the difficulty mid-mission if I'm having major issues (say, with one-shot dual pistol wielding freaks). I'd be fine with sacrificing loot if I could just have this.
So the solutions:
Difficulties need to be more standardized. Normal should be normal, Advanced should be advanced, etc. Right now Advanced is anywhere from 0 => 10 on difficulty which kind of defeats the purpose of the slider.
The slider should NEVER be grayed out. Ever. If I'm on my bridge, I should be able to set my level to whatever I want. If you really must, go ahead and dis-allow changes during an actual mission, but no where else.
Make the current difficulty be more visible when accepting a mission. Too often I forget that I'm on Advanced when I want Normal or vice versa. When we accept a mission there should be something that tells us "Hey dummy! You are on Advanced!" Don't make it a prompt, just make it NICE AND BIG so we realize what is going on.
I'd prefer the ability to change during a mission if things get way too dicey but if that's too hard or not acceptable, I'm ok living with out that.
Death penalty: I love the death penalty. I would prefer to separate the death penalty from the slider so that I could have the death penalty affect me even if I'm on Normal. That's just a wish of mine though 
To wrap up, I love the difficulty slider but I want to see some improvements to it. I think just a few tweaks here or there would really make it useful and a blast to play around with.
Comments
You can't change the difficulty when you are in a private instance to prevent SP exploitation. I don't think they'll find a way to work your desired functionality into the game.
If your examples of the difficulty slider's fault is going to be ground missions, then you should know that your pleas are falling on deaf ears. dstahl and Cryptic are already looking into the overpowered dual pistols and ground combat is getting wholly remade (complete with cover system, YAY!)
Finally, I believe that Stranded in Space scales now that it has been remastered. I may be wrong, but I do know that I didn't have any problems on it playing Elite with two others.
Stranded in Space does NOT scale, at least it didn't the last time I played it (a couple of weeks ago I think). I specifically went to replay it because it was remastered.
Unless the vast ground changes that are coming are going to introduce massive changes to difficulty scaling, I think the rest of my post stands.