I just posted about this in another thread. Without cutting and pasting my analysis there, let's just say that:
Full Leather is your baseline. Average weapons should be about equal in attack to said leather.
Legendary items should provide around 3 times whatever Full Leather applies. The 3 to 1 advantage, after square/squareroot is factored in, is actually 9 times better.
Nothing should be more than 3 times as powerful as your baseline. Otherwise, it's just cheese. Heck, 3 to 1 (9 to 1 after square/squareroot) is pretty much cheese as it is!
'nuff said!
Also, I like the idea of chain being it's own tech, versus the plates. Perhaps Armor tech should break down to: Padded (1's), Leather (2's), Chains (3's), Plates (4) and Light Plates (3, with less penalty than chain but more expensive), and Legendary stuff at 5 or 6's. Breastplates at 2/3/4/5, with the best breastplate in the game being about 8 (or 12 including armlets). With Plate greaves, that 8/12 becomes a 16, add the Soldier's cloak, and you have an 18 defense.
At one point, I think the Armor of Azor counted as both breastplate and armlets. It should.
So current defenses look about right to me. Just make sure the best attack ingame isn't much more than an 18 (say 24 with bonuses). That 24 versus the 8 def (4 pt. Leather Cuirass with Greaves and armlets) will mean damage 8 out of 9 times.
This applies to Monsters as well. A monster with say a 30 attack will literally eat you for lunch, unless you have godly dodge skills!
As for shields, I'd suggest a more complex mechanic. Bonus to dodge skill, then a roll to reduce damage before it is applied to the total defense strength minus the shield.
Example. a 9 attack versus a 6 defense (armor), with a 2 point shield. First damage roll is 9 versus 2 (so maybe a point of damage is blocked). The remaining attack strength (9, although perhaps only 8 or 7) versus the 6 defense. Remember that the shield is also adding to your dodge skill (say +2 to dodge), so you will get hit a little less often in the first place. A 4 defense shield will be pretty useful, using this convention.
A wall shield (6 defense, no bonus to dodge) would be interesting, as 9 attack will usually get about 5 damage past it, which armor then has to deal with.
If shield defense values were doubled/increased, they'd have the opportunity to divert more damage. Under no circumstance, though, should they be higher than the 'average' armor suit they go along with. a 2 def shield by itself is pretty pointless. a 4 def shield will probably drop a point of damage from that 9 attack, perhaps 2. an 8 def shield will probably only let about 3 damage past it, so I'd suggest a 6 cap (or 8 with a wall shield, which should also reduces your speed by 1 or 2, and also a penalty to dodge 'cuz it's so heavy).
Also, as far as 'magical bonuses' (rings, amulets), these should be equally available. If there's a +3 attack amulet, there should be a +3 defense amulet or ring. As long as Attack items pooled together equal the defensive items, balance will be maintained. Keep in mind that Strength will skew the numbers in favor of the attacker as the game progresses.
Same for tomes. Do keep in mind though, that run of the mill units don't benefit from those tomes, so heroes and sovereigns will start outclassing them by quite a bit in the late game, with some generous reading...
Quick edit: As for cranking out damage, raising attack and defense appropriately to allow for more damage to 'seep through' the armor is also fine. Personally, in the early game I like the levels where they are now. Needing to beat an opponent up over 3-6 attacks should be the norm, with 'average' equipment. I think that spear is a little TOO powerful for the early game in most cases. And I'm glad to see the warstaff bumped down a little bit in availabiltiy. A 15 attack should be a mid/lategame value, not an early one.