Maybe? They have to rebalance timewalking though with every xpac. So it’s not unprecedented.
As far as “challenge” have always worked.
I mean arguably mythic raids still exist (unbalanced) for you to get mogs. That was a “challenge” in it’s time that doesn’t even get balanced today (not something I am advocating for here).
Achievements still exist today which is a “challenge” way of completing bosses and often have mounts associated to them.
Similarly the “mage tower” back during ToS was far more challenging than during Antorus when your ilvl inflated pretty dramatically (as well as chances at leggos you may want/need).
So i mean - challenge is subjective no matter how you slice it.
I do agree with you it would require more “work” for Blizz from balancing stand-point. It still is less work than new content entirely I would think … and it gives players something to do.
Personally I am not a fan of re-hashing content. However they seem pretty content to do so, reintroducing old dungeons as “new” with each xpac.
So at the very least make it interesting with something worth going for.