Here are my two cents worth for the argument.
I think Mech Inf using 2 movement should attack at a 0 or be unable to move in the combat move phase unless paired with an armor or air unit. Mech Inf using 1 movement would attack as infantry. This would prevent all mech infanty forces from replacing armor completely. Or Mech Infantry could be replaced with “trucks” that carry 1 land unit and cost 1 IPC without counting as a unit for placement restrictions at a factory.
Option 1: What if Tanks offered damage resistance. “For each hit applied to an armor, roll a die to see if that hit is absorbed (2 or less)” (or try 3 or less since you have to remove the selected tank if it fails). All hits must be assigned before any absorb rolls are made. Each “hit” tank only gets 1 absorb roll per round, excess hits go on other units first or that tank is destroyed. (such as when the tank is by itself and the opponent scores two hits on it. The first could be ignored if lucky, but not the second.)
Option 2: For each hit applied to an armor, re-roll that that die keeping the new result. This would be stronger as weaker units would have a hard time getting through the armor. If an Inf were attacking, each 1 rolled and applied to an armor would make them reroll and look for another 1 to score the hit, but strong units would still rip through armor, as rerolling a 4 would not be as big of a deal. This may be too over powered. You might give the reroll a 1 better pip to hit result, either -1 to the die, or +1 to the chance to hit. As above each tank would only get 1 reroll per round. Excess hits would be automatic, as when 2 hits are scored on the last tank.(Example: If you rolled 6 hits on 5 units( 4 tanks and 1 Infantry) 1 tank and 1 Infantry are killed regardless of the rolls. The fifth hit would have to be on the Infantry, the sixth hit could not be rerolled as the 4 armor already used their 1 reroll per round. The other 3 tanks would have a chance to live.)
If armor could mitigate damage, their high cost would be right. Giving armor two hits to destroy would be too over powered, but a 33% or 50% (option 1)chance to soak off a hit might be just right for the cost… making 1 armor potentially better than 2 infantry for the same money. Try attacking 6 armor with 12 Infantry if 1/3rd of the hits are ignored on the armor.
Just my food for thought. I agree that armor will likely be built less often unless factory placement restrictions come into play more often.