I've been searching a bit, there is no way to set a minimum worker difficulty?
Not on the website. However, I think the server honors difficulty requests sent by stratum as a command-line option of your miner.
Through my research I read that the server actually rejects the command line setting on bfgminer
Really curious if it can or can't be done, can anyone provide answer?
It can not. There is pretty much zero reason to set a custom difficulty. The server already pretty aggressively chooses an appropriate difficulty.
Wouldn't having large asics doing higher difficulty ease the load on the server?
I understand a machine can do 1024 difficulty fast, so running 256 will just submit more shares at a more aggressive rate correct?
I was under the impression it was the opposite, that if 1024 was set and the machine could run through it it would end up submitting more shares at a higher rate than 256 from the constant new work and submitting more shares of less difficulty.
(Sorry I am a little bit confused at this point!)
The pool targets each worker submitting 16 shares per minute, or one every ~4 seconds. Whatever difficulty it takes to do this at your hash rate (higher difficulty, less shares/min) the pool tries to use. Higher target difficulty shares are worth more, but found less frequently. Likewise lower target difficulty shares are found more often, but worth proportionally less. (I specifically say target difficulty because the achieved difficulty is meaningless.)
This is to make sure you submit enough shares to make stats usable and at the same time limit the amount needed to send to the pool. 16 shares per minute is pretty aggressive. Some people want far fewer shares/min (higher difficulty) for some reason, which makes no sense and just adds unnecessary variance.
With the pool setting the difficulty appropriately, the pool can determine what works best for the pool load, also.