I was very interested in this thread, because only a few weeks ago I had a spirited discussion with a couple of my fellow gamers about whether or not chain shirt is broken.
Frankly, the suggestion to eliminate chain shirt is an attractive solution, but let me ignore that for the moment, in part because I just like having chain shirt in my campaigns. Here are a few other remarks about chain shirt and the heavier armors:
1) I like chain shirt in part because it does seem balanced within the light armor category, especially at low levels. It costs a lot more, so a first level character gives up a lot if he opts for chain shirt. For me, it often seems to be an issue of chain shirt vs. longbow at first level.
2) Even though chain shirt is the best light armor, and even though it is superior to at least some of the medium armors, I think it's only the slam-dunk choice for two classes, ranger and barbarian. You might think rogues and bards, but the armor check penalties and arcane spell failure, I would think, would steer them towards masterwork studded.
3) I think there are two other factors in 3e that skew the world towards chain shirt. One has been discussed pretty thoroughly, namely mobility, which really does have a big impact on combat. The other is, in my opinion, that Dexterity has equalled if not exceeded Strength as the most important stat. Dex impacts AC, initiative, ranged attacks, and reflex saves. In addition, compared to 1e (I never really played 2e), damage in 3e is actually greatly increased, and the consensus I get from other players is that it's better to have a high AC than high hit points. So, players are tending to keep Dex high, and they don't want to lose that Dex bonus.
4) One thing that might help heavier armors recoup some of their value is if max Dex and armor check did not drop together. It may make sense, in that any armor that limits your agility would affect both, but it means that the discrepancies between light and heavier armors in these two respects is startlingly large.
5) Another idea I had is to make masterwork armors more significant in the medium and heavy categories. For instance, say that all masterwork medium and heavy armors decrease the check penalty by one *and* increase max Dex by one.
6) Finally, one reason I'm ultimately not too bothered by this issue is that I like it better than the 1e situation, where everyone who was allowed to wear metal armor had platemail or something even heavier. A ranger would strive to have platemail as soon as he could get it, and your local adventurers' tavern had a flotilla of ironclads sitting at the bar.
Anyway, thought I'd share these ideas and encourage this discussion to continue.
--Axe