I know a lot of people on the forums have been having trouble with Seth doing out-of-difficulty moves on the easier difficulties, as was I, so I decided to do some game testing.
The current issue with a small number of people is that when on the easier game difficulties, Seth is using special counters, blocking a ridiculous amount and teleporting without abandon. It's so bad that he becomes unbeatable for inexperienced players and others are just telling them to practice. As it turns out, however, it's some kind of conflict with the Install and the current 1.01 patch.
When using Ryu and Dan on Easiest, Seth was destroying me in 9-10 seconds, often getting Perfects, but my friend was having an easy time with everyone on his PS3. He hadn't installed the game, but he installed the patch. So I deleted my Install, went back into the game without patching and did another Arcade with Dan using the same settings I was before. Seth was a piece of cake.
So I got my friend to do the Install and he did the same thing, then got beaten to a pulp as well. He was patched to the 1.01 version. As of right now, I'm not patched and I'm installing the game. I'm going to do a few different setups to see if it's a matter of not being able to install over the patch, or if it's a matter of both the install and the patch not working together properly.
So if you're having issues with low difficulty Seth beating you down to extreme levels, go back to the main PS3 Home screen, go to Game and scroll all the way up to the Game Data Utility. Find the Street Fighter IV tab and press Triangle, then select Delete and try playing the game without an install to see if it solves your problems. Please note that deleting your install will also erase your preferences, like your control setup.
Good luck!