Complete lack of any AI for the monsters

[Jarulf]

The problem, as you've seen, is that elite creatures (the only things that need groups and therefore the only mobs that I'm really talking about) hit for thousands of points of damage per hit.  With a cloth-wearer's low damage reduction, mobs in MC will generally two-hit a priest. 

The solution you propose is to reduce their damage so that they don't kill priests as quickly.  Then why bother bringing priests?  If their damage is that low, then warriors won't need healing to kill them (and what healing they might need will be done by paladins).  Why bother bringing any cloth-wearer if there's no way any other class can keep mobs off them?  And if you shift the system so that casters can wear heavy armour, why bother bringing warriors or paladins?

The changes you propose wouldn't require adaptation of tactics.  Certain classes would simply become completely useless.
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You are still locked into the existing system. Sure, one might have to change the system oe normal/elites. Why must EVERY monster have tons of damage just because it is supposed to be a hard encounter? Why no mix? Why not mix in hard hitting monsters with less hard hitting ones that for example goes after priests and such. After all, players are vastly different, not all hit hard, not all wear huge armor and so on, why not have the same for monsters? There are endless possibilities.