I like Dreams in the Lich House, I read and re-read it on a regular basis.But, I already have a work email and a university email and a personal email and a gaming email... I'm not going to start another email addy to comment on it and oher G+ forums. So I don't, I occasionally comment here instead.
There has been much discussion lately on DitLH about quantum difficulty and whether this negates player agency. It seems to me that that John Arendt is absolutely right and quantum difficulty is an utterly reasonable way to deal with time in games.
Surely, no-one is claiming that only players have agency in an invented world? If not, then why can't monsters increase in levels over time?
The players, when they're Level 1, hear about some 'vicious' bandits in the locality. How vicious? Vicious enough to be told that they're vicious, that's for sure. Maybe there's 8 NMs, a couple each of Lvl 1 Thieves and Fighters, and a Lvl 2 Cleric. So what's vicious about them? Perhaps the PCs were told the bandits are vicious by a local tax collector - the bandits target tax collectors and string them up while giving the loot to local poor, which is why the locals love the bandits and hate the Sheriff's men sent to round them up; or perhaps the bandits only attack caravans with only a few guards and murder all their captives but one who is released back to civilisation to spread the word. They don't actually have to be 'hard' to be 'vicious'. They just have to get a reputation for being brutal to those in their power. Level 0-1 NPCs can be vicious. Most Orcs are 'vicious' and they're the equivalent of Lvl 1. I'm sure the Sheriff of Nottingham and the Abbess of Kirklees thought the Merry Men were 'vicious', even at the start, though we might think of them as the good guys. They're still basically bandits, and being 'vicious' is a question of perception of action, not necessarily an accurate reflection of power to carry out that action.
Maybe then our gang should be: one L2 Cleric; two L1 Fighters; two L1 Thieves; 8 NM - not an insurmountable obstacle at all for a Level 1 party, and coming in at 14 levels in total. So anyway, the PCs ignore the bandits and go exploring other parts of the sandbox. 6 months or 2 years later, what are the bandits doing?
It seems to me that the only thing you can guarantee that the bandits aren't doing is behaving exactly as they were 6 months or 2 years ago. One of the things that is regarded as disconcerting in Kafka's books is that time passes strangely. A man torturing a second man in a particular room is still there, possibly months later, still torturing the same second man. Is this really how dungeons or sandboxes should operate? Should those Orcs still be fighting the same Goblins in the same room if you go back 2 years later? Likewise, should the bandits not have either been caught, or alternatively attracted more followers or otherwise increased their fighting ability? I'd think change would be inevitable; the local law-enforcement might have sent patrols (allowing the bandits the opportunity to ambush them and get better kit and maybe a few new recruits from the underpaid men-at-arms who didn't want the job anyway, for example), The bandits may have upped their raids on local caravans, settlements, temples, wherever they can get loot, and attracted more recruits through their fame. Other outlaws may have come to join them, desperate landless men might journey into the forests/badlands to seek them out.
So 6 months or 2 years later, the party is say L3 and the bandits might number one L4 Cleric (she's been levelling up in the meantime), three L2 Fighters, four L2 Thieves, six L1 Fighters, 8 L1 Thieves, two L1 Clerics, and a L1 Magic User, as well as 20 NMs. That's 45 levels and a much more serious proposition, though of course the party should still be able to take them. Effectively, the bandits have levelled up at the same rate as the party.
The key to maintaining player agency I think is information. For this tripling of the bandit threat, the players should be told that the bandits are gaining more strength, hitting bigger targets, doing more audacious raids, ranging further afield, or whatever (maybe all of these). If the rumours about the bandits keep coming, the reminders that they're there still keep coming up, and the players ignore them, then when the PCs finally do get there, they can expect different conditions than there would have been if they'd taken on the bandits before clearing the Hobgoblins out of the Old Tower and then going after the Kobolds in the Endless Swamp and the cultists in the Forbidden Temple and whatever else the party has been up to in the meantime. As long as the PCs keep hearing about the changed conditions (and if the bandits are attacking either mobile of fixed targets in the area, why wouldn't the PCs hear about what's happening?), then what's the problem? The bandits want to become more powerful, they have a drive and dynamic to do that I think, and in game terms, it's up to the players to stop them. If they're not stopped, then the bandits should become more powerful.
Though this example uses bandits it holds good for anything. Successful Orc tribe breeds more warriors or attracts another tribe as allies; dragon matures a bit and is a bit tougher two years down the line; middling wizard has the time to complete his researches and is really nifty with his new death-spell; gelatinous cube spawns loads of copies of itself if it's left undisturbed to replicate, or whatever else.
To me then the notion of 'quantum difficulty' isn't a problem, it's an essential recognition of the passage of time, a way of imparting a dynamic structure to fixed encounters and a way of making choices have consequences (concentrating on this threat now leaving that threat for later gives the latter a chance to thrive). Much more of a problem would be to eternally peg encounters to the levels as first heard about, as if only the PCs can learn by experience. Pretty sure 'monsters' can do that too.