Ok, so I've been using the insane health regen gear that came with the complete edition (I guess it did anyway) and thus I haven't died a single death in combat for the first ten hours or so.

Now I felt like I couldn't forever use Level 5 gear already being Level 14 myself, so I sold a bunch of stuff and geared up with what looked like pretty top notch stuff for the Level I'm at.

The result: I've been pretty much dying my way through every major fight ever since.

Especially the now missing "Health on hit" ability seems to be fucking up my "playstyle" pretty badly, since now I seem to have to rely on health potions which coincidentally have become increasingly rare also.

Has this game like a known balancing issue where te difficulty suddenly spikes (I'm at the 10-12 hour mark) or do I just need to learn how to play now?

Probably just need to learn how to play now. I've found relying on gear bonuses is almost like a crutch, it gets you by but you aren't able to get around without it. I'm far from an expert and die stupid deaths constantly (though I have completed one play through) but if you get a good grasp of the mechanics you can basically avoid ever getting hit by pretty much everything.

The crazy gear you got at the beginning of the game was a big problem for me. Thinking I might give it another whirl and just destroy it all when I start it again.

Learn to correctly dodge. If you find something is fucking up your play style then you need to change your play style. Adaptability is key.

Darksiders 2's combat was one of its strengths, there just wasn't enough of it. If you're relying on health potions, then you probably aren't dodging enough, or dodging very well. Try to get better at knowing when an enemy is going to attack and when to get out of the way, try to mix up your playstyle some, etc.