+++As a disclaimer, I currently run a Caldari Medium frame for shield tanking. There is no way I would invest into anything higher than Basic Armor Plates with the current state of things+++

I've always been puzzled how the Armour Plates are the only module with a drawback. I've heard some explain this as weight slowing you down, but in the far future why do we make things stronger by making them heavier? Why can't we just use more durable material that isn't made out of concrete? (better material would explain the increased cost in ISK as well as the increased CPU/PG strain on the suit).

As it seems counter-productive to complain about the speed penalty (as I'm sure it is a balancing factor), I'll focus on the way that it scales as I think it is absolutely absurde. The basic module grants you 65 hp to armor and a 3% speed reduction. This module is, in my opinion, the BEST armor plate you can purchase. While the Advanced and Proto armor plates grant more HP, they also take an inordinate amount of speed with them. Here's the current spread between HP gained, Speed Reduction, and SP required to use these modules:

Module________________Armor HP__Speed Decrease__SP Investment
Basic Armor Plates_________65________3%____________55,970
Advanced Armor Plates_____85________5%___________242,510
Complex Amor Plates______115_______10%___________932,760

So while Complex Plates offer less than 2x the protection of Basic Plates, they reduce your speed by more than 3x!! Advanced Plates aren't any better, giving you 1.2x more protection, again at the cost of almost 2x speed reduction over the Basic Plates.

While using a Complex Armor Plate does save you a module slot, it costs you almost 1mil SP to get a massive speed reduction that is far worse than 2 Basic Armor Plates in armor granted, speed penalty, SP investment and ISK cost.

My suggestion would be to lower the speed penalty to 3%, 4% and 5% (for Standard, Advanced and Proto respectively), or even have the speed penalty decrease by going 5%, 4%, 3% as you should be rewarded for upgrading your gear.

Just my 200 ISK

I stated what I used so that people didn't think I was some Gallante whining about my Mods, I WANT more variety in this game.

Except... not? It doesn't have more module slots, PG or CPU than any other suit and has the same eHP as the Gallante suit and less than the Amarr suit. The reason Shield Tankers are the only thing you see is because Shields have a higher regen rate than Armor (for free!) and the modules that extend the shields have no drawbacks (other than CPU and PG usage). If Gallante suits could put more than one Complex Armor mod on without needing a wheelchair to get around you might actually see viable armor tankers.

I expect the right solution is to add the proper downside to the shields, like a larger sig radius or even maybe a larger hit box if that's possible within the engine.

I'm one of the few people that armor tank in this game and let me tell you right now...

Using complex armor plates is a waste of time and sp. There is no reason to use them because of how much more vulnerable you become. By using 3 advanced plates I only get a 15% penalty for 255 armor. By using 2 complex plates I only get 230 armor with a penalty of 20%.

WHY? WHO THE HECK DESIGNED THESE THINGS.

The build I like using is my 436 Shield/357 Armor with 17.5 armor repair. The only way to armor tank in this game is to use a huge shield buffer and to have tons of skills in armor repair. That, or find yourself a logi (I myself am one so I don't have the second option :P)

The reason I say that's the only way, is because the slower you move, the easier you are to hit. That means that even though I could technically fit 632 armor on my character, I would be moving as slow as a heavy. So there would be no chance of me ever running away or dodging bullets.
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Currently, the more armor you have, the easier it is for you to be killed. This should be the opposite way around...but no. It will never be that way until the penalty bonuses are fixed.

Look how it's look like in EVE:
http://null-sec.com/hangar/ (Ship equipment/Hull and Armorr/ Armor plates)
There are six general types of Armor Plates, and every module is a little different in each type.
The problem in Dust is that we don't have so many Armor Plates(for now). In Future Shield tanking also will have drawback as Armor tanking, but in different area - in EVE Shield Extenders make you signature bigger, so everyone is locking you faster,and weapons hit you harder because you are bigger target for them .