Some enemies have high AC, some have lots of hit points.
In the first case, you need higher attack to pass their AC. Your own AC or your damage aren't that important. By making more attacks, you may have higher hope of hitting them though...so its up to you to decide when you have that option.
If they have lots of hit points, you power attack all you can, because you know you will probably hit - you just need to do damage.
Most of the time though, you are going to fight something that will do lots of damage to you...in this case you will need to have high AC yourself (enough to survive till you kill it).
In a recent dungeon I had to hold the line for many rounds, until the sorcerer killed the hordes of zombies. I had no hopes to kill them myself though, so yeah, my 26 AC helped a lot.
So, over damage vs AC I like to have the option to choose according to my needs every round. (TWF with shield like you do/power attack/combat expertise help with that)
I know this is not the answer you want, but its the answer to what you asked now
To answer your other question, if you get attacked often get armor, if you feel that you do very little damage get the bashing (it will cost you a fortune, but if this can't stop you, nothing will

)