Yeah it really takes off in Act 2. You gain a level every 3 encounters and each level increases armor and damage by 20 and sometimes up to 50% (!!!!!). Considering a 4-man party is 40 equipment slots, it's completely crazy to expect you to be able to have level-appropriate gear during this phase.
Here are some of the stats that control this:
key "FirstVitalityLeapLevel","9"
key "FirstVitalityLeapGrowth","1.25"
(There are more of these level leaps later on to)
key "FirstPriceLeapLevel","9"
key "FirstPriceLeapGrowth","1.75"
(There are more of these level leaps later on to)
key "ArmorToVitalityRatio","0.55"
key "VitalityToDamageRatio","5"
key "HealToDamageRatio","1.3"
We can see the game then keeps these pillars in balance with each other using these ratios.
So at level 9 Vitality increases +25% more than normal and then Armor goes up to using the ArmorToVitalityRatio var.
First off the cuff and perhaps what one of the mods do, is where you see these LeapGrowths, just set them all to 1.00 and there is no bounce, same progression all the way through. This assumes these vars are for player and npc.