Coming from both a Paladin and Warrior tanks point of view, there are a few things to keep in mind. One of which was very nicely pointed out from the healers post.
Smoother inflow of damage = reaction time for healers to bring your health back up to par.
The way Prot Paladins achieve smoother damage inflow are through haste benefits from the passive ability [Sanctity of Battle] which returns higher uptime on their main mitigator, Shield of the Righteous. Thus, they must also ensure that their main mitigation hits are always hitting, every time. So, Prot Paladin stat priorities run Exp (15%) > Hit (7.5%) > Haste >= Mastery > Avoidance Stats. Some tanks will throw away the avoidance stats all together and run crit when they feel they have achieved sufficient numbers to maintain max uptime on their SotR, this for more effective use of vengeance.
Prot Warriors are similar in this regard, in that we have similar stat priorities, but we have increased benefits from mastery as opposed to haste in our Critical Block. Stat priorities are Exp (15%) > Hit (7.5%) > Mastery > Avoidance. Having Expertise hard capped and hit capped ensures that your main rage generators are hitting and generating rage for active mitigation. With this stat priority, and thanks to vengeance, you will also see an increase in your DPS numbers. One thing you must keep in mind, Blocking does not have a DR (Diminishing Returns) value similar to avoidance stats like dodge and parry. That is to say, once a block occurs there is no set number of swings based on your block value before a block can occur again, such as dodge and parry do. The higher warrior mastery numbers are, your number of blocks will also be higher.
Now while some might feel that having avoidance will result in less damage taken, preferring avoidance stats will result in higher spike damage, and thus less time for healers to react, and thus more deaths.
For instance, look at Tortos. Tortos has a special ability called [Snapping Bite]. This attack hits for 525k damage in a 10 man normal setting, armor withstanding. Now given that avoidance may result in fewer regular attacks leading up to this attack, one snapping bite can result in an almost instant tank death. 525k in a 10 man progression setting is a terrible, terrible hit to have to soak... It is a critical hit and to my knowledge non-avoidable. But, as it turns out like any critical hit, for a shield tank it is blockable.
So, thanks to Protection Warrior mastery and Shield Block, we can take a 525k hit and chop it in more than half. This gives healers a very sufficient time frame to see the hit, react, and pull us back up to normal health. Active mitigation and passive blocking will keep us from sustaining fatal hits after the large hit.
Hopefully this post doesn't seem to be rambling off too much. In the end, case in point, active mitigation foremost and mastery for protection warriors will trump the avoidance stats in every single situation. The way the mechanics work, smoother damage inflow gives healers time to react and us time to hit CD's should the need arise, to stay alive longer and protect our group longer.
Block has diminishing returns similar to dodge and Parry, though not quite as harsh.
Diminish returnes don't work in the manner you prescribe, Parrying an attack does not lower the chance that you Parry the next attack, Diminishing returns in regards to Dodge Block Parry is the process where as you acquire more of a stat you need even more rating to increase by a given amount e.g. if you have 0% parry it requires 885 parry rating to go to 1% parry, to go from 1% parry to 2% parry requires 900parry rating.
The only way for Snapping Bite to be a critical hit is if it hits a non-tanked spec player, or if a tank specced player is sitting down when the attack lands. Additionally Logs have shown that Snapping bite is both parrayable and dodgeable
EDIT: also you're kinda preaching to vatican here, Tankspot has been maintianing avoidance as a bleh stat for 3 expansions now.