Anyone explain why a bard can't wear any armor if he is to cast a spell? Is this a bug? That's pretty bad!

No, bards could never cast spells in armor. Mage spells cannot be cast in armor unless elf in elven chain. Or armor like bracers of defense, good luck. Cheers

Ya, this is not a bug, it is by design.

Assuming you have a mage in the party, delegate their spells so that the bard has pre-battle buffs and defensive spells, and the mage has all offensive spells. Then just remove the bard's armor and cast your spells to prepare for battle, then put it back on and charge.