Maybe I'm uninformed, but I haven't seen any strong evidence that the relationship between defense and damage taken is much other than piecewise linear, and mostly just linear over the normal defense range. The 1.0 "floor" you speak of is likely not actually a floor but a plateau in the equation, similar to the one that exists in the player pDIF formula. As evidence, I offer low level monsters outside of cities. They hit for 0-1, which means they have base damage greater than 0 and pDIF at or below 1. If I was a betting man, I would say that monsters likely use the same pDIF equations as melees except with a 4.0 Ratio cap and no level correction. You can't get below 1.0 on things that matter because they have such high attack.

Point is, no one is ever going to stack defense because +30% defense does not lower damage taken by 30%. If Ratio is directly proportional to damage taken, then changes in ratio are proportional to changes in damage taken. Adding 25% defense would reduce average physical damage taken by 20%.

* Cool, Defender does do something! But using Defender decreases your attack by 25%, so now how do you hold hate?
* Most dangerous monster attacks aren't physical damage, so why would you sacrifice your ability to hold hate to take 20% less damage from them?
* If you increase your defense too much, you run into this lower plateau or "floor." At that point, increasing your defense by 25% decreases physical damage taken by less than 20%.