I understand where you're coming from, but I'll counter with these points
1. Some people still do play split screen multiplayer games, and I would probably play your mod split screen (I get friends around every so often for playing the Amiga and other old consoles/games).
2. Easier difficulty is balanced by several factors, such as - smaller screen size, slower frame rate, social distractions and skill unbalance (eg one player is always going to be worse than the other one).
3. The difficulty is less important in a co-operative game, since it's less about trying to beat a challenge and more about having fun with friends.
Going to attempt to finish the first level of the Alien Trilogy mod now, wish me luck.