Correct. You can not submit the game, but who says you can't play it and still compare notes and see how others did in comparison to you? Playing is the most fun, actually submitting it and seeing your name listed is just icing on the cake as far as I am concerned.
I would imagine that just setting up and managing one game per month is pretty time consuming for the mods. Having another game would probably be too much to ask.
As for the difficulty level - I actually like how it is now. Us players that can't devote 20+ hours to the game a week can actually have a good chance of doing well in a game. Not everybody can play well at higher levels, even if they have been playing the game longer than 2 months. As others have said already - most of the potential players that would like the lower difficulty settings are probably less likely to post in the forums.
As it is now, the difficulty will ramp up each month until it gets to a hard level, and then probably drop back down. In my mind this is the best compromise, and does not run the risk of alienating a large, if quieter, base of players.
I agree that everyone should be challenged to play at a higher difficulty level than they are used to because that is the best way to learn, but someone who is at Warlord level is much more likely to be turned off by constantly having to play Emperor games than someone who is already at Emperor having to play easier levels.
Just my $.02...