I don't believe difficulty settings are a fair comparison to Lemmings ranks.
In most games with a difficulty setting, it's one of two cases:
Scenario A - The content is the same, but some factors are tweaked. Perhaps the player has less health (very common). Perhaps the enemies are a bit smarter, or stronger (also fairly common). Maybe there's more enemies (eg. Commander Keen 4-6). If relevant to the genre, maybe the player obtains less items / money. However, the point is, the main content remains the same.
Scenario B - In the case of randomly-generated games, the gameplay area might be larger and/or more complex. Minesweeper would be the obvious example here.
Neither of these is really a direct parallel to ranks in Lemmings; as a new rank contains entirely new (but non-random) levels. A hypothetical pack could indeed treat difficulty in the same way as Scenario A here - perhaps there's three ranks, "Easy", "Medium" and "Hard" (using very creative names for the purpose of giving an example). All three contain the same 20 maps, but perhaps in Easy they're 20-of-everything, save 50%; in Medium they have small but still somewhat lenient skillsets (not unlike those common in late-Tricky / early-Taxing); in Hard they have a very restrictive skillset and usually require you to save every lemming possible.
However, in reality, I don't think there's even one pack so far that works that way. In a typical pack, "Easy" contains 20 levels, "Medium" contains 20 completely different (and somewhat harder) levels, and "Hard" contains yet another 20 different (and harder again) levels. Maybe some of the Medium / Hard levels are repeats of earlier rank levels.
A few repeat-heavy ranks as examples:
- Orig Taxing - 16 repeats, 14 non-repeats
- Orig Mayhem - 16 repeats, 14 non-repeats, counting Just A Minute (Part 2) as a repeat
- LPI Medi - 12 repeats, 18 non-repeats; many of the non-repeats do have repeats in later ranks
- LPI Danger - 17 repeats, 13 non-repeats; two of the non-repeats have repeats (The Deadly Climb and Coalburner)
- LPI Psycho - 23 repeats, 7 non-repeats
- LPO Perplexing - 15 repeats, 15 non-repeats; two of the non-repeats have repeats (Security Bypass and From Endings To Beginnings)
- LPO Mental - 19 repeats, 11 non-repeats
Even in the most extreme case - LPI's Psycho - nearly a quarter of the levels are completely unique to that rank.
Basically, ranks are more a grouping - they generally (though not always) indicate difficulty, but they aren't comparable to an actual difficulty setting.
However, I do get your point about watering down the experience. FWIW, I am giving second thoughts to this idea overall at this point. I simply felt that that particular comparison was a bit off.