Obviously it is easier for the VF to have better netcode, but that only excuses AR so much. It is possible to release something too ambitious for what the current environment will allow. Like, years ago we had dial-up and nobody liked online fighting games at all. Perhaps this is why there are so few games like Anarchy Reigns and we are only seeing an influx of them now (e.g. God of War Ascension, Ninja Gaiden 3). At the same time I admit as an American my experience is going to be different than a Japanese because of a poorer internet infrastructure (I do everything I can to minimalize this difference: Play only when the host has 4 bars, plug right into the PS3, etc.)
If you guys had included system-link play, then I probably wouldn't bother complaining because then there would be an out even if I couldn't easy use it. By tying the multiplayer to online (save for playing with bots) you've basically put that whole section of the game at the mercy of online. (This also brings up the question for how long the multiplayer of Anarchy Reigns will accessible to play. We are looking at another Phantom Dust here. Good thing I think the campaign is pretty good in itself, at least on Hard.)
I don't know why you think I'm trying to make excuses. Despite sometimes running into big problems I usually do pretty good, though I can see a level beyond me atm (e.g. the people are #1-10 on the Deathmatch leaderboard, which I saw one of them in action). The big problem is that I can't safely react to what I'm seeing on the screen sometimes and if I'm really serious that is deal-breaker. The game is pretty fun, so I'm pretty forgiving of it, but I can't just ignore when this stuff happens. It is flaw in my play that I can't do anything about, an unresolvable frustration.
And defense is extremely good, arguably good enough that it takes away from the game in most modes I think. As far as I know there are two ways to get beyond a block. 1) Grabs. However grabs have a huge break window, far greater than any fighting game anyway (which is not necessarily a bad thing, but this is basically the only real viable option). 2) Break their guard. This usually means doing a lot of very punishable moves and spending a lot of effort in performing risks (naturally defense players are a huge advantage in this situation, it is like jumping in on a DP-ready character in Street Fighter).
Neither of these options are going to work very well against someone who really doesn't want to be hit. In a deathmatch or battle royale people are not going to cooperate to break this one player's guard, they are going to fight each other and be easy pickings for the turtling player. Considering this there is: 1) No chip damage outside rampage (correct me if I'm wrong), 2) Very fast regen, 3) A dodge on top of this very powerful block (which makes me really wonder why there is no chip damage).
Obviously defense needs to be really good for situations where people are hitting you from multiple directions, but I think they should have spent more time refining it. First off you have the 4-player modes (which I think are actually the best in the game) which clearly don't demand that much defense. Second, defense is still too good in Battle Royales because people are fighting amongst themselves and this game is rewards kill-stealing at opportune times.
Also if you could tell Iwata I'll buy this for WiiU next time you see him that'd be great. (Then use that chance to add two player via gamepad and fix the messy and time-consuming interface between matches.)
EDIT: Oh yeah, this game has parries too. I haven't used them and I haven't seen other people use them on me, but that's yet another defensive option.