I think 'horribly flawed' is a bit of an exaggeration. There are issues with how it currently is in the alpha; future updates (including the one going through QA now) will add features or make refinements, etc.
To be honest, the system has potential, but in it's current state it is far too polarized.
A simple and rather elegant way to improve the system would be to have your % of armor remaining dictating your % chance to avoid CC. For example, if you have 100 total armor, take 20 damage your armor is now 80, which is also 80%. Your chance to avoid CC is now 80%.
This doesn't void armor stacking, and it adds an element of "expected RNG" that allows you to influence your own odds in a skillful way.
Naturally this is a nerf to the current system, so it has to be compensated by either increasing armor values across the board or by adding more ways to regenerate armor.
I would prefer the ladder, as those mechanics are scarse. Right now I think it's only fortify for physical armor and frost armor for magical?