Impossible in the first game was really manageable. In fact, it's a lot easier if you only use the plasma cutter, because all of your upgrades and resources can go into that one weapon instead of spreading them out. You can also sell all the ammo you find for other weapons which makes health not that hard to come by. I think it's a great balance for survival horror since it's so easy to die but not unreasonably difficult.
Compared to the sequel, where the hardest difficulty has literally no save points. I love a challenge and I am a bit of a masochist, but that is fucking ridiculous.
It took me like a month to get through DS2 on that mode. By the time I finished and got the foam finger, I was done with that game lol.
Impossible w/just plasma cutter was vastly more enjoyable.