If you played 2000 more, you'd hate armor mode, trust me.
Sure you still take damage, but everything you do is armored. You think about how you can exploit that fact with some characters with extremely fast abuseable normals, or really good specials, and the stuff you could do is crazy. You also gotta take the Counter Hit damage bonus into consideration. I've seen some CMV's using Armor Mode and there is some insane (although situational) stuff that it makes possible.
If there's one thing SNK deserves credit for, it's coming up with new stuff nobody else thought up of at the time, regardless of how ridiculous of an idea it might be put into practice.