My highest level Character right now is Ghirihim. He's currently 126 or so, and I have the same problem.
(by the way, He's the highest because He's both mine and my firend's favorite character, so, even if I don't intend on making him the highest, it was kinda bound to happen. All in All, I really would have liked everyone to stay the same (or right around the same) level.)
But anyway, as I was saying- Yes- It's just insane. One little tiny tap from a moblin, and you've lost an A rank? That's STUPID.
( I bet I can see comics being made about this. xD ) - But seriously, that's not a 'difficulty' issue, that's just annoying. I'm sure there are much better ways to 'amp up' the challenging factor- if that is indeed what they were trying to do.
If they had wanted to make the game difficult in a more interesting way, then what they should have done was design a few missions where the optimal way to beat it wasn't particularly clear. I had enormous satisfaction in figuring out how to A Rank the 3 tier Great Fairy scenario, same with the 2 tier Wind Waker scenario. Beating those was immensely rewarding, even if there was some frustration leading up to it. Since combat itself in this game is not particularly mentally taxing, having that different sort of puzzle to chew on a bit felt great.