Are you sure defense is on diminishing returns? My understanding is that it is not, and neither is block rating. Dodge and parry both are however, but you need to start hitting 40% or so in either before the DR really kicks in hard (ie takes a ton of points to move up 1%)

Either way stacking up too much avoidance/mitigation is bad, a tank with 20k hp and 80% avoidance is still going to die on bad luck streaks. Once I'm past 20/20/20 dodge/parry/block, and obviously 540 defense, I like to focus mostly on HP. I'll still gem dodge/stam to match colors if the bonus is great, but generally gem and enchant for stam/defense combos. I'm currently at 29.2k hp, 25.5k AC, 22.5% dodge, 20% parry, 19% block on my prot pally, unbuffed - its nice hitting 36k or so raid buffed

A feral druid I pug'd 2 drake OS with had 54k hp buffed, omg! You pretty much need a feral MT for 3 drakes I've heard. Really suprised you don't see more feral druid tanks, they seem the beefiest - maybe AOE tanking issues?