Okay, so from what I can gather, it used to be worse than it is now, but it's still pretty overpowered, and the problem comes about as a combination of factors.
1) Speed-built characters never need fear a monster again if they get Tac Armour; characters not built for speed are still doing ridiculously well with this, and probably don't have much to fear either.
2) It's assembled from three common drops, all of which drop from very early in the game.
3) It regenerates.
Point one is a characteristic shared with Phaseshift, but Phaseshift remains balanced by not being something you can rely on, and by punishing the player for sleep-deprived mistakes; you can screw up pretty monumentally with Tactical Armour, and it's okay, because you can retreat without being hit and your armour regenerates itself as if nothing happened. If you make a sleep-deprived mistake with Phaseshift, it may well be gone.
Point two is a simple case of "items should be balanced to their obtainance difficulty". Tactical Armour is very much an I-win card for certain builds, and it's still a highly viable option for everything except Entrenchment.
Point three was covered in point one; while Phaseshift is just as bad, if not worse, than Tac Armour, it forces you to keep your head and play sanely, it does not hold your hand and say "aww, you got shot, here, let me make it better for you".
Were I to nerf Tactical Armour, I'd remove regeneration, and maybe make it a Green + (A3) Advanced Assembly; the latter would be nice, but possibly overkill.
Uh, thoughts?