It is true that in order for something to be challenging, it must be hard (defined as: most people can’t do it without extensive effort, or at all), ergo, most players must fail, at least at the beginning. But not all hard games are challenging. Rather, most are not. The trick is that a in a challenging game, failure comes from bad decisions, while in annoying games it comes from honest mistakes or bad luck.
In a challenging game a failure is a learning experience, in an annoying one it’s just “being a n00b” or unlucky. Chess is challenging: you make a decision to move a piece somewhere and by that you create a setting that inevitably leads to defeat in 20 steps against a skilled opponent. In a WoW raid you decide to don’t stand in the fire but your hand-eye coordination isn’t fast enough. Or some raidmember runs at you with a bomb. Or have lag. You can’t learn from these mistakes. You already know that the fire is hot. You just can’t do anything about your hands not moving fast enough besides practicing for hours. When you fail nevertheless, you are annoyed. When other raidmembers fail, you are definitely annoyed. When you are defeated in chess, you are more like “oh, that was smart on him” and are motivated to play again.
I am still playing Subnautica on hardcore mode, without growbeds or bioreactor and still enjoying it, because I have to make decisions instead of trying to jump better. I can’t go into the details, because your answers would be spoilers. Which is a serious problem with this game: as this is a puzzle game, you get no in-game resources in many encounters, just clues. If you know the clues already, those encounters would be pointless. So I can’t discuss with you unless I want my play ruined. And unfortunately if I discuss it afterwards and you choose to read it despite “SPOILER” in the title, your play will be ruined.
Sorry for that non-example, but you have to take my word now: being able to make decisions that has costs in the game makes the game challenging and entertaining.