Resistance, like armor, has diminishing returns on resistance per point because the actual benefit to effective hp per point of resistance is a power curve; thus, the actual benefit to you in terms of effective hit points/time til death is linear. To put this another way, going from 0% damage reduction from armor to 50% damage reduction from armor doubles your effective hit points, but so does going from 80% damage reduction from armor to 90%; so the points have to get less valuable as you get more of them, or the best defensive strategy would always be to focus on one defensive stat at the expense of all others.
tl;dr: Just pretend you never heard that resistance and armor have diminishing returns and your intuitive understanding will be accurate.
I see what you're saying now. So, instead of considering any kind of numerical values or base damage, etc. when looking at a gear upgrade it's best to just focus on how much % damage less you will be taking after the change.
0% Armor: 100,000 - 0 = 100,000 damage
50% Damage Reduction: 100,000 - 50,000 = 50,000 (50% reduction from 0% Damage Reduction)
80% Damage Reduction: 100,000 - 80,000 = 20,000 (40% reduction from 50% Damage Reduction)
90% Damage Reduction: 100,000 - 90,000 = 10,000 (50% reduction from 80% Damage Reduction)
95% Damage Reduction: 100,000 - 95,000 = 5,000 (50% reduction from 90% Damage Reduction)
As your overall Damage Reduction gains grow smaller, each individual percentage reduces more damage from what you were previously taking. I'm starting to see how this works now.
It's more the case of the difference it makes from 90% -> 91% -> 92%. For instance, a base hit of 100,000 is 10,000 damage to 9,000 damage to 8,000 damage at those mitigation values; that is, 10,000 damage to 9,000 damage means you take 10% less damage than before and 9,000 damage to 8,000 damage means you take 11% less damage than before. Mitigation may climb slower at higher Armor and Resistances but the net impact it has grows when removing those last few percentages.
It's the inverse of the +Attribute returns that get smaller per +1% as your total +Damage% grows. +900% -> +1000% just isn't as big of a net gain as +100% -> 200%. Likewise, -90% to -91% is a lot bigger of a deal than -9% to -10%.
Basically, the return of mitigating "1 more percent" is greater as you get more mitigation which balances out the increased cost of how much more Armor/Resist you need to achieve it. That's what creates the essentially linear EHP effect of Armor and Resistance despite their diminishing returns.
Thanks for the explanation. I think I need to rethink my gear a bit. Right now I have what is effectively an 88% damage reduction on my Barbarian from approx. 65% damage reduction from resists and 65% damage reduction from armor. Unless my math is off, that is.