I'm not gonna argue with that, but my imagination fails to draw a picture of "better" Hell. After all, challenge was only one small thing among every change and addition that made Jungle overhaul grand. Maybe some progression irrelevant boss? Or another dungeon mini-biome like Jungle Temple? More Hardmode loot and mobs?
I could imagine tons of things. There's also the fact that Redigit mentioned Dante's Inferno layered Hell, although that is probably not a question until Terraria 2.
Right now, Hell is a generic strip along the entire world. It's not split into sections, despite being right below biomes.
I'd like to see biomes above creating variations in the underworld. Right now, I can get Crimson Mimics to spawn and Souls of Night to drop, by standing below Crimson and just fighting.. you guessed it.. the same weak-
bat mobs and demons that were there before hardmode.
I'd like biomes above to create variations in Hell. Below Jungle, you will have Jungle Hell, which will be as difficult as Jungle but worse due to the fact that it's.. hell.
New mobs, vastly higher spawnrates with more powerful mobs, and just general
ery. This would also make an upgraded Wall of Flesh (Hardmode 2?) a worthier foe once you realize you have to run through these biomes to fight him. You'll be having to prepare for every scenario, and you're truly gonna be proving your skills by showing that you can master every biome and defeat the boss while you're at it.
There's so much that can be done, things that would make the world much grander. I wish I could be a game designer on Terraria 2, I want meaningful and consistent content that would surprise you and also prove a real challenge. It's important that if Hell gets a facelift, it's more than just adding DPS against the player; it's new mechanics or at least seemingly new ideas.
Another thing is the underworld lava creature that either pulls you in and hurts you, does a crocodile-style death roll, hop-bites the
out of you if you're close to the lava edge, or other similar things, whatever fits and demands caution. It'll force you to think before venturing around in the world's most infernal place. A dodging type of gear would help a lot avoiding this guy.
You got me on a tangent here so I'm writing down an idea for Hell right now, I'll have to post it in a new thread. It became too big for just a patch, unless 1.3.5 is a thing.