If anyone played Combat Mission series - Battlefront came up with nearly perfect armor simulation system, based on real life ballistics and taking into account armor thickness, angle, velocity of incoming round, type of round, and even material out of which the round is made. Tanks had essential systems like optics, FCS, tracks, engine, and etc modeled in as well - all of those systems could be damaged by penetrating rounds. Battlefront's model was as close as one can get to a tank testing range behind the computer monitor, and it was done as early as 1999 (I believe first CM came out around then).
It boggles my mind that nothing similar was done for Arma2, considering the realism of infantry part of simulation. Hit point system is outdated to say the least.