I can shed some insight here.
Minecraft and The Sims are not "hard" in the sense that you will fail a lot.
Merely that they are hard meaning you start the game with very little understanding in how it works, and then have to master those systems to do what you want.
As you are placing blocks, you have to deal with resource management, your own life, etc.
A game does not have to be hard to be challenging. Nor does being hard make a game challenging.
My favorite example from recent games is one called Demon Souls. Many people say it is hard, and challenging, yet It has one aspect that I love because it perfectly demonstrates the difference between the two, because it is a perfect example of something that is hard, but not a challenge.
It has what used called an arcade coin-trick. A piece of gameplay put in purely to eat your quarters and lengthen time playing, without adding an equivalent value of fun or different playstyle.
The challenging part of the game is learning each individual enemy, how they fight, how you can react, etc. You develop actual skills as the game goes on and your proficiency goes up.
The coin trick is the death and respawn limit. While you can argue it adds a sense of urgency and being careful to the game, one could have done this without such a harsh penalty (loss of all exp, plus time wasted attempting to regain it only to fail at the end). This is an example of a piece of a game that is hard, but not challenging. It is hard because it punishes failure, without adding much extra fun.
So with this in mind, you can see why minecraft and the sims can be considered challenging in that they engage the mind and thought, without being hard.