Given that we can now see a visual change with the addition of upgrading armor, and that for some units they can go from cloth to plate, I'm thinking that the trivial +1 to +3 bonus seems rather odd.
I think it would be rather interesting if a mini mod were made (I Might try my hand at it myself, since it would require only a few tweaks in the text codes) to put a greater emphasis on the armor upgrades. For Instance, while upgrading from cloth to leather or light mail to heavy might be only +1 or +2 armor, upgrading from leather to mail, or mail to plate, would be far more drastic, and far more expensive.
I'm not sure of the values, I'd have to look at the text files when we can unpack them, but basically this would let players, if they were rich enough, afford to 'create' new units, where previously the game mechanics limited them. It's not logical that a wealthy faction cannot decide to arm it's spearmen with enough armor to become heavy infantry, and this would remedy it.