[andrewas]

AC goes down, as when you hit you are rolling a d20 (20-sieded dice) and trying to score above your THACO minus your targets AC. Analyse that (or take my word for it) and you'll find that a lower AC makes you harder to hit, and a lower THACO makes it easier for you to hit things.

3rd edition rules (as used in neverwinter and icewind dale 2) do things differently, and higher armour classes and attack bonuses (THACO dosent exist in 3E) are better than low ones.