Walks with the Snails
Erudite
Armor in the PnP game Rifts worked like that. Your armor had a set amount of damage it could absorb, then it wouldn't block any more. Since you typically used high-energy weapons like particle guns and plasma rifles, that usually meant instant death. It could get to be kind of a pain to keep going through countless sets of armor, though, and repairs were ridiculously expensive; I remember after a while we started shooting guys in the head just so we could salvage their body armor. I don't know how well it would work on the computer, you might have a repair skill like lots of games with equipment deterioration offer, but overall it would probably just be lots of pointless micromanagement if you were expected to fight a lot.