Really the problem I see with ff and mitigation is this...
Mitigation goes up WAY too fast. It is essentially instant. If you focus fire, the first wave of damage brings it to max miti and everything else is just at 50%... I think it should be more gradual as the computer dials in on the weapon harmonics. Simply put, don't make it go up instantly, but rather have it go up slowly with the cap determined by DPS. Focus Firing SHOULD beat miti as an entire fleet aimed at one ship ought to take it out in one or two volleys... Mitigation prevents this thing that is common sense. If you make it increase at a relatively steady rate (based more on a constant than DPS), you could get something that doesn't do anything to 1 on 1 fights, and mass focus firing more powerful. After all, good luck mitigating damage from fifty cannons as opposed to one single weapon... Make it climb with time, perhaps 3-5% of max per second but have the max mitigation scale to DPS, thus making 30 ships firing something you could ultimately mitigate highly, but in practice you won't have time...
Perhaps this would work, perhaps it wouldn't.. This is the system I have always wished mitigation to be as it is both realistic and also good for gameplay. No longer would miti shoot up when focus firing, but rather would increase slower. Now of course because a large fleet attacking would give a bigger max miti, the mitigation would go up faster because it is going a a % of the current max miti. If you went from ff to 1 on 1, it would slowly fall back down to the one and hold steady....
Hope that all made sense, but if not, I'll explain it in a way that does...
Simply put, 1 on 1, not really all that much of a change...
20 on 1: mitigation goes up but, as you are not dealing a whole lot of damage, it would discourage it.
70 on 1: Mitigation would have no hope of stopping it in real life. You would completely overwhelm the ship and neutralize mitigation completely.
And thus, frigates would die almost instantly while a level ten cap could withstand a quite a few volleys. It makes small ships more disposable and makes capitals more important...
Oh, and don't make ships statistically weaker as they take damage... That would screw up gameplay and though it would add to realism... There is a reason that in FPS's getting shot in the arm doesn't make you drop your gun... If you want a justification in lore terms... Just say that the repair crews are capable of keeping weapons and engines online and only focus on actual hull plating once you are safe...