Actually I think shields give a lot armor but are mostly suited for mages because they do not need the 'autoattack' damage. But its true, sword and shield is bad. Very bad.
About armor system, lebrucht, u only played as 2, without any companions, right? All the problems you quoted only exist on that scenario, really. But its true that some of them exist.
1- You really cant do much when you are the only one that use magical CC, and have none else to do magical damage, but you can always support and buff.
2 - What? hydro doesnt have damage? I rly disagree... Maybe you are new into the game, but a solo hydro build with glass cannon and stuff and hurt, A LOT.
3- Magical damage weapons are great when that damage is also increased (elemental marksman for example), and it helps your mages break the magical armor.
4- Fire/earth mages are supposed to do damage, while water/wind mages usually have less damage and more CC, both will have low defenses, right, but thats about positioning, i couldnt care less for ppl controlling me as a mage, i almost always play glass-cannon xD
All of these problems do exist if you play 4 PCs.
2. I think that OPs paragraph was meant more as a 'hydro deals less because its mostly for CC' and thats true. It doesnt deal little but less then Pyro and less then Source skills from Areo. And to be honest Areo has the best CC in the game so...