Oh my bad I was being dumb. I was thinking full BAB.
No problem.
It's an interesting idea and it's very easy to pull off, but I guess it really depends on what you
want from armor as to whether or not it's a good fix. It certainly makes medium and heavy armors better at low levels, where they really matter. Some theoretical observations:
Fighter: He'll have good AC at low levels at the cost of 10 feet of movement. Against most things you'd expect to face, he won't get hit very often. He'll likely have an AC of 16 to 20 depending on Dex and if he uses a shield at 1st level. Orcs will hit on a natural 12 to 16. This seems reasonable. At level 3, he'll likely have an AC of 25 to 27, which is fucking
huge for what the game expects. Ogres will need a natural 17 to 19 to hit. AC at level 5 is probably about 30 to 34, so trolls only hit on a natural 20.
Cleric: Per the fighter, but somewhat lower due to a slower BAB progression, prioritizing Wis (and maybe Cha) over Dex, and using a light shield instead of a heavy due to casting. So at 3rd level, the cleric might have closer to an 22 - 24 AC (10 base + 12 fullplate + 0-1 Dex + 0-1 shield). Not as good as the fighter, but still good. Ogres hit on a natural 14 to 16.
Druid: Has a bit more incentive to use hide armor, but not much. This incentive also doesn't kick in until level 2, when the class gets +1 BAB. Basically, you trade in 10 feet of movement to get an AC boost equal to 1 + 1/2 BAB, or 1 + 3/8 class level. Meh.
Rogue/Ranger/etc: You use light armor and you get a minor boost. Full BAB classes pick it up faster than 3/4 BAB classes. A nice minor boost, but nothing to write home about.
Barbarians: Incentive to use medium armor, but nothing crazy. You've likely traded in Fast Movement for Pounce anyway, so you'll be charging a lot, and you might want to stay in light armor to keep your charge range at 60 feet instead of 40. You have a real decision to make when you can afford mithril full plate. By that point, you'll be roughly 7th level or so, which means that full plate has a base AC of 22 (8 + 14). Compared to a chain shirt (base AC of 7) or mithril breastplate (base AC 12), it might be worth it.
In general: This scales fast enough that you might not have to worry about nickel-and-diming yourself with all of the little +1 AC boosts like you normally would. So, you might pick up +1 on your armor for 1K, but you have less incentive to pick up a +1 ring and +1 amulet at 2K each. At mid levels, you can keep your AC competitive really cheap, and you might be able to boost it to competitive levels with magical items at high levels. You might find fighters going toe-to-toe with dragons at high levels... until the dragon casts Wraithstrike!
Really, this seems to scale too fast past level 1 until probably into the double-digits. I guess it depends on what you want. If you want heavy armor to be the De Facto "I can't get hit" card, then this works nicely. As mentioned in other threads, you'll need a good offense to keep you from turning into the turtle that the enemies simply ignore. Anything that lets you make touch attacks becomes much more valuable against armor-wearing PCs and NPCs.