Right now the game has one difficulty setting in survival mode. As it stands, it falls entirely on the developer to make the game both fun and challenging. With only one hard difficulty setting, the balance between fun and challenging is precarious.
If there were a difficulty menu where different aspects of the game could be altered by the player before starting a game (e.g., monster spawn rate, thirst and hunger consumption rates... whatever else...), then the players could do the work of balancing the game. This sort of setup has more than just the benefit of letting players have some control over the difficulty. It also allows for different kinds of games to emerge from the same program. A game with a high monster spawn rate and a low food consumption rate requires a different strategy than a game with a low monster spawn rate and a high food consumption rate.
This game seems to be about creating a village that doesn't get screwed over (at least not too quickly). But if the trials you face are always the same, then the same (or similar) strategy can be employed routinely. Hence, the player only goes through the agony (and fun) of figuring out how to raise a village once.
Having a difficulty menu with numerous modifiable variables would allow players to create their own insanely difficult and unique variations to the game. Players would need to develop new strategies to deal with different difficulty settings.