Your math is wrong about diminishing returns. It's called diminishing returns because every point in X yields less of Y. In this case Y is DR, and X is armor.

To further illustrate my last point lets look at an example:

At 70% DR you have an effective health of 333.3%, increase over last = 10.8%

At 71% DR you have an effective health of 344.8%, increase over last = 11.5%

At 72% DR you have an effective health of 357.1%, increase over last = 12.3%

...

At 95% DR you have an effective health of 2000%, increase over last = 333.35%

At 96% DR you have an effective health of 2500%, increase over last = 500%

You analyze DR and assume the same amount of armor will get to 71% DR as 72%, which it does not. In fact, the amount of armor you need to the next 1% of DR increases exponentially, hence why Armor is diminishing amount.

Just look at your own graph and look how much armor you need going from 40-50% DR and from 70-80% DR.

http://i50.tinypic.com/1pgtaf.jpg

Bottom of the line is, you need to stack resistance if your armor is 8k and you have 10 resists, assuming you can get resists as easily as you can get armor.

Those bullet points show why you get less DR per armor point. Because otherwise the value of armor would increase as you got more armor. So it's an explanation for why things are the way they are, instead of DR scaling linearly with armor.

Diminishing returns really implies that the effectiveness of armor goes down as armor goes up, which I think I've shown isn't true. I guess there is some semantics issue going on because you're not the first to tell me I don't understand what they are. So lets just agree to disagree about the exact meaning of it.

It is true that the relative value of other mitigation stats goes up as armor goes up, as I've also shown. So yes, resistance becomes more useful as armor increases, but that doesn't mean that the effectiveness of armor is diminished, which it's not. 1 armor (generally) yields the same bonus to survivability whether you have 1,000 armor or 1,000,000 armor, all other things held constant.

*Digression*: I believe that if you use a shield, armor increases the benefit of your block. Say you're getting hit for 100 mitigated damage and your shield blocks 5. That's 5% of the damage you would have taken without the shield. Now you get more armor and you only take 50 mitigated damage. Your shield still blocks 5, but that's now 10% of the damage you would have otherwise taken instead of 5%. So it would seem that armor (and any other stat which reduces damage taken) increases the effectiveness of your block. So I

*THINK* that using a shield actually makes each armor (or resistance or w/e) point worth more than the last. That's also assuming that block is calculated after DR, which I assume is true and seems to be the case from my personal experience. Most of this stuff has probably been done to death by people who play WoW, but it all needs to be redone a little bit once more is known about the way damage is calculated in D3.

And you know, I've said this a number of times but these charts and things aren't super complete or anything. They're only accurate in a world where things like dodge, block, and passive abilities don't exist. I can work on bringing all that stuff in together if people are interested, but the current work is just to prove a point. (That armor is still good past 7000, or whatever).