I've been thinking about this one for a while, and I kept coming back to that common element in myth: that iron is disruptive to magic. And therein lies a possible answer. Assuming we have a relatively high-magic world, one where it's possible, though not necessarily likely, for anyone with enough cash or the right connections to have some arcane firepower on their side, and furthermore assume that we come up with a system whereby iron is disruptive to magic, and we have a rationale. Metal armor might not be much good against guns, but soldiers in the field still wear it so the other side's mages can't fireball the whole army and be done with it. To get a bit ridiculous, beat cops might very well be issued chain mail so the local street gangs' pet adepts can't magic missile 'em in the back - assuming manufacturing facilities were in place, a chain shirt couldn't be that much more expensive to produce than a kevlar vest, right?

On the flip side, this also covers the sword angle. Since iron disrupts magic, the obvious "mundane" solution to taking down magical threats (or humans protected by magic) is to use steel weapons. Maybe the mass of iron present has something to do with it - a steel-jacketed bullet might not do squat to nullify a mage armor spell, but a steel sword will cut through it like a hot knife through butter. Reinforce this with a lot of magical "vermin"-type creatures that have DR 15/iron or something like that - they may eat bullets like popcorn, but one good whack with a steel melee weapon and they curl up and die.

Thoughts?

- Sir Bob.