That is true. You don't have to make an easy diff if your normal is acceptable enough for an easiest diff, noone says you need to have a 1/1 spammed diff, what we want is to have a nice spread which would make the mapset accessible to everyone. If you can do it in your normal diff, then that is fine.
Also, just to clarify, nothing in the rules says you have to make an easy diff, it says you need to have an easy enough diff (which is around 2.5~3 stars) in your mapset, which is possible to be achieved in a normal diff. I find this acceptable, and some mappers find this a way to go, their choice. Before you say that you can fake your star ratings, I think it's clear that if you don't fake anything and keep things pretty simple and have that much stars, that diff is good enough for the lowest diff.
As for speaking for beginners, well, everyone is different. When you look at things from our perspective where pretty much everything needs to be covered, I think it's understandable that we want to make things easier on people who are terribad at the start and prefer only easy diffs. There is already a criteria I mentioned in my previous paragraph, and that criteria isn't really that hard to achieve.
However all this discussion drifted offtopic much, the original question was, what was the definition of [Insane].
You cannot exactly define it, without it being clearly obvious (AR9 and stuff), but if a diff is clearly harder than a [Hard] in the mapset, then it's a good candidate for an insane, even if it's on the easier side compared to the insanes we see today (sometimes). This is one of the reasons why a diff spread is important, just so you have some sort of a tier between your difficulties.
Ofcourse it is possible to nitpick here, for example, how can you tell a diff is actually a [Hard], or how can you tell a diff is [Normal], but I think the above example is sufficient enough to apply the similar (or should I say the same) logic for these cases.