I have seen a mechanic which I call "armor points" in many games: Quake, Counter Strike, etc. Generally, while the player has these armor points, he takes less damage.

However, they act in a similar fashion that health points do: you lose them by taking said damage.

Why would you design such a feature? Is this just health 2.0, or am I missing something?

To me, armor only makes sense in, for example, RPG games, where it is a constant that determines your resistance. But I don't see why would it need to be reduceable during combat.