Problem:
Since DDO uses a d20 for NPC's attack rolls, all it takes for a player's Armor Class to become completely useless is for the NPCs' attack bonus to be nineteen points over the player's AC. As a result, very few players invest in Armor class because the sacrifices required to obtain meaningful Armor Class are just too great for what is gained in exchange.
From a game design perspective, this is bad because it reduces variety and depth: characters that focus on damage all have the same defense against attacks, 5%, instead of being able to consider the trade offs of gaining more Armor Class.
Suggestion:
For each mobs with a BAB high enough to have them, give them a random bonus on their attack rolls as if they were making one attack of an iterative chain. Mob attack animations are too slow to make it really iterative - most monsters would usually die too quickly to reach the end of their attack sequence - so instead treat it as if each attack they make was randomly chosen from the iterative list.
For compatibility with existing game balance, the average attack bonus in the quasi-iterative system should equal their current attack bonus.
The simplest way to implement that is as follows: for every mob with BAB 10 or more, each of his attacks gets a bonus of (1d3-2)*5. So it will be a -5, +0, or +5 bonus on each of attack. The result is that the range of meaningful ACs increases by 5 in each direction; yet the AC that gets hit 50% of the time will still be hit at 50%. If a character currently (barely) is hit on 5% of attacks, in this system there's a 33% chance that an attack could hit 30% of the time, meaning it's harder to reach the AC cap. To take it further for higher-level content, mobs with BAB 20+ could get a (1d5-3)*5 bonus. That way, the 2-19 range expands to -8 to 29, thus more than doubling the range.
PS: The idea is Angelus_dead's. I wanted to refer it in a post but when I did a forum search for it, I realized that it has not been elaborated much on these boards and never had been posted in the OP of any thread. I thought it would deserved its own thread, for greater visibility and easy referencing.