It's not a gross misunderstanding of the situation. By putting the shield value into armor you create a situation where firing on a unit from the flanks or rear is EXACTLY the same as shooting them in the front. There's no benefit. AT ALL. To me, that's taking an entire aspect of the game out, and is unacceptable
The lack of flanking fire is about a 4, while shields hurting folks in melee is about a 9 on the broken-ness scale.

Without flanking fire, archers would still function, fulfill their primary role, and kill people at range.

With their shields *hurting them* no shield unit can possibly be used for its historical role in any way shape or form.

The equivalent would be if horse archers shooting into someones flanks actually had their arrows reflected and wound up shooting themselves in the face.

Not only is there no benefit AT ALL to having shields in melee IT ACTUALLY HURTS YOU. This is a huge issue and all but the most partisan horse archer fanatics completely uninterested in game balance would agree.

Now, you may feel that the putting the shield value into armor isn't a perfect or even the best fix to the shield problem, and that's fine, but don't try to pretend it's not a major deal.