There's a thread on RPGNet that asks: "How would you like armor to effect damage?". Personally, I wouldn't like armor that effected damage, unless it was armor that caused damage to attackers. I'm reasonably OK with armor that affects damage.
But seriously, since I've been re-reading excerpts of The Fantasy Trip recently, I was reminded that I'm OK with damage reduction in TFT because I link the concept mentally to that game but prefer D&D and descending armor class because it puts a conceptual limit on armor effectiveness. The natural tendency of most people is to think of 0 in a game as the lowest number possible, even if a few people are prone to push the limits into negative numbers. If you use descending armor class and no subtraction, in theory there would be no armor better than AC 0. For ascending AC or armor that reduce damage, there is no "best", because you can just keep adding numbers to existing ACs or DRs to create even better kinds of armor.
You can, of course, set an upper bound. Arbitrary numbers don't work so well, but limiting all ratings to single digits works because it appeals to simplicity. Of course, 3e screwed this up by setting "no armor" to AC 10. If you are going to use ascending AC, the worst possible armor should be AC 0, since you would then have "zero armor".
TFT's damage reduction, fortunately, assumes that unarmored characters have 0 damage reduction and the numbers go up from there.