DDO, for the most part, follows D&D’s paper rules quite closely, but there are a few glaring exceptions that can catch folks out. Such is the case of grazing hits.
Grazing hits occur when you have not managed to roll high enough to beat your opponents AC, but have still rolled fairly high. Players do grazing hits on a roll higher than 10, but far more important is that monsters also do grazing hits.
How often a monster does a grazing hit depends on the dungeon difficulty. The threshholds have been tweaked a few times, but at the moment appear to be:
Normal: 17 or higher
Hard: 15 or higher
Elite 13 or higher
As you can see, on Elite, 40% of monster attacks are going to do you some damage, no matter how high your AC is, (as a roll of 20 is an automatic proper hit).
A grazing hit only does base weapon damage, such as d6 for a shortsword, even if it’s a +5 shortsword of flaming, it still does just d6. If it’s a greatsword, it’ll be 2d6. Some monster’s physical attacks are very substantial, even when just considering base weapon damage.
Fortunately, players get some respite from grazing hits, as we are born with a feat that reduces our damage received by 50%. Shields and centred monks also get a % reduction in grazing hit damage. These reductions take place after Damage Reduction has been applied.
However, especially on elite, if you are being stabbed at by several enemies, each of whom is going to score a grazing hit if they roll 13-19 for half base weapon damage, you are in very real danger of being rapidly nibbled to death.
While we might argue over the maths, at the least it is very useful to all to have some source of damage reduction, as even a single point of DR can make a very real difference to how well you deal with the regular smallish amounts of damage from grazing hits.