Here me out.
People are joining Champion with no experience dealing with friendly fire. It’s not that Champion is too hard, it’s that people are playing 20-30 hours on Veteran and conditioning themselves for a different type of game.
Turn Friendly Fire on in Veteran but make the damage something to the affect of 1/2 a hit point. Enough to trigger the character voice lines and screen flashes without doing so much damage to actually make Veteran much harder.
Also add a description in the difficulty meaning stating such.