Glass in TES is not the same as glass in our world. Just like ebony is actually a tree in the real world, but in TES it's metal.
Isn't Ebony actually more like our Obsidian? The cooled magma from Red Mountain creates the Ebony, Obsidian in our world is very strong but brittle, like ceramic, and flints off to razor-sharp edges naturally. Aztecs made formidable weapons with obsidian.
Of course, while Elder Scrolls Ebony shares creation method with obsidian, it doesn't share material characteristics, being a good at absorbing shock (high item hp) really is the only key difference. A more "Realistic" Ebony armor would be incredibly strong, even bullet-stopping strong, but very ablative, meaning it would become damaged fast, though ablation has the added effect of directing energy (In a sword impact or bullet impact's case, kinetic energy) away from the body, resulting in great protection up to the point of total failure.
Anyway, enough of that.
More is always better, but it's better to not make armor a direct linear progression. Using glass armor against say, dwarven steel. Glass has much higher damage resistance, but is very brittle. It can protect the user from a few extremely powerful blows, and then breaks and fails. This would suit an ambush combantant, who isn't going to be in direct combat, but maybe needs high levels of protection from say, a straw crossbow bolt, or a lucky strike from behind. Dwarven steel on the other hand, doesn't reduce damage as much as glass, but would hold it's shape and protective qualities even in vigorous combat. Suitable for the barbarian or man-at-arms, expecting to take a warhammer blow every few seconds.
That was just a very broad example, and there's a myriad of ways to make most of the armor sets useful, as opposed to a direct linear progression like Oblivion. Some factors include
Cost (Some materials and sets can be prohibitively expensive to buy and maintain, Ebony, Glass and Daedric for example)
Durability (Steel and Iron can hold their form well under pressure, studden leather or Chainmail are more likely to break and fail)
Damage mitigation (Base defense)
Critical mitigation (Reduces damage specifically from critical strikes, for example, Chainmail would have a low value, full plate, or the aforementioned glass, a high value)
Weight (self explanatory, but can also extend to things you'd see in a D&D ruleset involving evasion or mobility)
Damage Threshold (Something I really like in New Vegas, more complicated than just "Defense" it effects offensive choice more than defensive choice, and Damage Threshold would be an excellent addition to shields, not so much Armor)
Allure (Wouldn't it be cool if highwaymen would indentify someone wearing extravagent clothes/armor and attack because of the potential gain, and perhaps even ignore someone in simple garb or thrashed armor, as the risk-reward is too low? Adding another dynamic to progression, curbing the desire to stand out in attention gathering apparel when your combat skills leave something to be desired)
Damage Resistance (Certain types of armor resist certain types of Damage. Chainmail resists slashing well, but has a weakness to piercing, plate resists piercing strikes that slide off the plates, but blunt strikes cause greater shock-trauma as the plate transfers most of the energy directly into the body)
These are just a few examples, but the point is made that there's so many ways to diversify, that even a handful of options can really do wonders for the player's experience of individuality in their experience.
I think I speak for most everyone when I say that Oblivion's armor was lackluster and uninspired, much like the rest of the game (Though unispired of the highest quality, the game is still amazing, just feels as though it lacks the care and detail we saw in Morrowind, and are even seeing now in Fallout 3 and New Vegas). Right now, looking at New Vegas, I'd say that game hit the "Happy middle" part of progression. The game's challenges progress, but also there are many opportunities to step away from the linear path like Oblivion. You can find a Riot Shotgun at level 5, there's level 25 Deathclaws just north of where the player starts, that can even one-shot level 15+ characters. As mentioned before, the Damage Threshold mechanic is an amazing artificial and bypassable progression block. A skilled player can take out Giant Radscorpions (Which to this point, will resist all damage for the most part) by knowing the world well enough, that they put some Silver-Sting poison on a few throwing knives, lay some mines down at a choke point, and lure the scorpion into the ambush, crippling the legs with the mines (Prevent the devastating charging sting attack) and finishing it off with the poisoned knives. (I did this at very Hard difficulty, hardcoe mode, and trust me, it's as satisfying as it sounds, out in scorpion gulch southeast of Hidden Valley). But with all that said, it's inadvisable to kill the Giant Scorpions, because of the prohibitive cost and risk. But the option is there, and that's what Bethesda's games should be about, Options.
Anyway, I think that's enough of a long-winded example.
TL;DR-> Oblivion Progression: BAD. Morrowind Progression: Better, but weak in Challenge. Fallout 3 Progression: Slightly Better than Oblivion, more Restrictive than Morrowind, but more Challenging. Fallout: New Vegas: Just Right! (though there is always room for improvement)