First, I'll caveat this with I've only just barely dipped my toes into t11 so I don't entirely know what I'm talking about yet. But that also means I have a recency bias because it's more fresh than those who's been doing it the last 8 months.
As is, I think the difficulty is just about perfect. My tank is basically capped out (outside of LRoA) on everything I can get prior to T11, with the exception of Hills of Shade items. Distant Relatives are about where I hit my limit. Meaning, I can kill just barely enough to gear up, which means it'll be a slow crawl to start before I can finally tackle all the stuff that spawns afterwards. Any harder and it becomes a frustrating game of wiping for hours and hoping I get lucky every once in a while with respawns so I can try again. That's not fun. Much easier and it just starts to become a check the box exercise of just killing everything and the "challenge" of the zone is one of time (which is typically what happens after you've hit the halfway mark of a tier, which I think is a good area to shoot for).
As far as things to look at, I do wonder if you have a roadmap for how long you want each tier to take. And by that I mean an estimated amount of hours. I blew through T5 in a week or two, but I also play a solid 8 hours a day (which is to say, time in weeks isn't how to measure, but hours). I bring this up because of a comment in ooc a while back regarding T11 being significantly longer than T10. And T10 is one of those things that I think needs more tuning. From what I can tell, it was developed to essentially be the end game without any content afterwards. The issue is, I spent a few hundred hours there and that seems like way too much. I know people like to talk about how it "used to be harder" with things like PB spawns and faction, but those things are more an issue for that initial break in. Once you get them out of the way and get your tank geared, you still have an insanely long grind. While I actually enjoyed the grind, I imagine most people will hit that wall and leave the server forever.
But if your goal is for it to take a minimum of 200 hours and cater to people like me who will grind and grind and grind, then I suppose it's in a good place (I should also caveat this with how I'm still not actually done with the zone and need several more hammers and tokens to "complete" it).
As for T12, I'll agree with Tnonim here. Players will always choose the path of least resistance. If the numbers show that two modes are equal, they'll choose the easier. If hard gives significantly more rewards, normal mode will go unused. Balancing this where it's an actually worthwhile feature seems like it could end up a waste of time as you'd be trying to predict human psychology and nailing the perfect numbers.
Regarding your other questions:
1) Lore: I honestly didn't notice any of it until VP, but it definitely makes it more engaging for there to be a story. That said, trying to read Venril spam 50 lines of text at me while I'm trying to kill him sometimes becomes a bit distracting.
2) Mechanics: For the love of god, please no more crazy knockbacks. I thought the juggernauts were bad (and they are super annoying), but then I met Ro'kki for who some reason kicks you halfway across the zone. Why is this a thing? It just makes it annoying, not difficult. Same with Master in ST, the knockback is so large that when you're on a boxing server that relies on proximity (and hits) to heal, there's not really any strategy involved, it's just obnoxious. I obviously can't comment on what the T11 knockback was like, but with how difficult it's been to break in already, I can't imagine that was enjoyable.
The DoT thing is interesting. In my mind I see it as a coding trick to basically account for the fact that the numbers are starting to get too big, so you basically set a handicap for the zone. To add to the "things that may need changing," I do find it odd that VP necros (and dragons obviously) are theoretically harder than T11 trash because you've got an AoE DoT versus single target. They make it incredibly difficult to break into VP because you've essentially got to overcome that handicap to survive (and with how rare things like GSS are in T10, that means the grind there becomes even longer).
3) Bane weapons: In theory they're fine. In practice I loathe them because now I've got to haul extra weapons around. Or if I forget to change them out (especially on every single box), suddenly I'm mid-fight and struggling against content that should be easy.
4) Other: I think people have struggled with the RNG of T5 for a very long time. I do wonder if the rate of random and trigger spawns shouldn't be increased by maybe 10% or even as high as 20%? Additionally, I'll agree on the timed ones being way too long. You can get around it with instance hopping, but that just seems like almost a roundabout way of cheating the system. And if you can get around the system so easily, why not just lower or remove it?
I'll just add this last one since you asked, even though I noted it not that long ago, but there's some kind of conflict with healing when you've got T10 Orc BP and UCv4 equipped at the same time that completely cancels it out. It's not a huge deal cause whatever, just put a different BP on, but still seems broken.