AS a general rule, the upgrades to ships are usually not as useful as simply getting more ships, and usually only should be seriously looked at when upgrading your fleet capacity gets too costly (aside from the first levels of hull and shields, which cost no metal at all and are quite cheap, they can sometimes feel worth it, at least to me). You'll likely find this
and interesting read, though, since homefleet mentioned it.
But anyway, armor matters the most, to me, when you're heavily using Repair Platforms or ships that repair the hulls of other ships. Since repair abilities repair straight up hull points, regardless of armor, ships with higher armor gain more from these abilities, since their hitpoits simply count for more. So paying points to armor under these circumstances, at least to me, makes sense.
TEC also, being very heavy on armor and hull but not so much in shields have a good amount to gain from armor. The strikecraft as well of all the factions have no shields, so getting some armor can help somewhat, although due to their overall frailty, having one or two more armor points usually won't help a unit that starts with just 70hp to begin with.
But usually, more ships outperform better ships for the cost, so that should be kept in mind.