After spending all morning pressing way too many buttons on my calculator, I will amend my statement and say that yes, armor suffers from diminishing returns.
After testing on my Fleet Negh'var with five identical layers of Neutronium Alloy, I can tell you that the efficiency of each layer of armor in adding its resistance to the previous amount came out to be: 98.3%, 94.9%, 92.0%, 86.1%, and 81.5%.
The total loss of performance across five layers of armor was just under half of one of the consoles i.e. about 1/10th of the potential. It's up to the reader to decide if this is a significant loss of performance.
Personally I'm not convinced that it's entirely deliberate given the erratic way the numbers jump around, and I strongly suspect rounding errors in the game's code.
Have you ever played League of Legends? If so, you will know that in a game like that, with a hard cap on defense, each added point to armor adds less to your defense... which is basically what I said in my most recent post...
They did this system to make it very hard to reach the resistance cap. You literally need to have 200 resistance to hit the 75% hard cap. It makes sense if you've played games that do that.