The fighter is a good defender because of his higher durability combined with the ability to stop people from moving. The paladin simply isn't as good at lower levels.
Assuming they're flanking, they're probably hitting around 60%, so the actual DPR is more like 8.5*.6 = 5.1 +7 = 12.1 for the pally, and 17.5*.6 = 10.5 for the rogue. But, that's /if/ you attack the rogue. If you attack the paladin, you only take 15.6 DPR, instead of 22.6 - if you're less 90 ps, that's the difference between lasting 4 rounds and lasting 6. Also, killing the rogue isn't the only way to stop granting CA, if you can manuever so he can't flank, the rogue's DPR drops to 4.25, while the paladins (if you don't attack him) only drops to 11.25. That challenge damage is automatic if you don't include the pally in your attack, and that's significant in 4e.Paladin damage ( with 18 cha ) 1d8+4, plus 7 ( for the challenge ). 15.5 damage average. Rogue will be doing 1d4+2d8+4+3( either str with brutal scoundrel, or dex with sly flourish). This is 17.5 damage.
Those happen once per round. Missile firing minions happen much more than that.But it's not just the AC difference. The monster marked by the fighter has a -2 and the fighter gets a free attack. The paladin just does damage in addition to the -2.
Those happen once per round. Missile firing minions happen much more than that.
As far as AC is concerned, a defender's AC can be /too/ high. If it's substantially more than 2 higher than those he's protecting with his mark, it becomes worthwhile for enemies to completely ignore him - 'Challenge' damage or no - and that's actually /failing/ at being a defender.

(Dungeons & Dragons)
Rulebook featuring "high magic" options, including a host of new spells.