Is there a reason you didn't use armor values?
I didn't use arithmetic armor values because I don't like the mathematics that comes along with them. They produce these very stark situations where overleveled characters are untouchable (because they take 0 or 1 damage from enemies), and underleveled characters are 100% useless (because they can't damage enemies).
Using arithmetic armor values also renders certain types of enemy units obsolete after a few battles unless you level them up alongside the player. Think back to Shining Force: most enemies would show up for no more than 4 or 5 battles. They'd be threatening in their debut battle, weaken relative to your characters, and end up totally pathetic by the last fight they appeared in. Then they'd be retired, never to appear again.
By contrast, when you use percentage armor values, enemies remain useful through most of the game. A battle where you fight a ton of low-level enemies remains challenging, since they can actually still deal some damage to you. (I wasn't able to take full advantage of this benefit in earlier Telepath games due to the old 10-enemy unit cap, but that's no longer a limitation in Telepath Tactics.)