We're taking a close look at defensive skills vs. incoming monster damage in 1.0.5. We’re going to be changing a few defensive skills for each class, including some direct nerfs to skills like wizard Energy Armor and barbarian War Cry - Impunity. However, we're also reducing incoming damage in Inferno, so players will actually come out ahead. In short the plan is:

Reduce the effectiveness of select defensive skills
Reduce monster damage by more than the mitigation lost by these skills
Putting both changes together, players actually take less damage than before

Why are we doing this? The reason is not complicated. High incoming monster damage combined with extremely powerful defensive skills make those skills and runes feel mandatory. Our goal is that by simultaneously nerfing defensive skills and reducing incoming damage, players who choose to continue using these defensive skills will take less damage overall, and players who choose to forego these "mandatory" skills will find themselves more survivable than what you would currently experience on live. Overall, these changes result in a huge buff in the player’s favor. Just how mandatory are these skills?

Here's a quick rundown of what's changing in terms of defensive skills in 1.0.5.
Barbarian:
War Cry - Impunity: Bonus resistance reduced from 50% to 20%.
Leap - Iron Impact: We’re adjusting the design of this skill. Rather than providing 300% armor for 4 seconds, it’s going to provide 100% armor per target hit for 3 seconds. So if you don't hit any targets, you won't get any armor. If you hit 5 targets, you'll actually get 500% armor. We are making this change because the intended fantasy of Iron Impact is a barbarian who leaps into the thick of battle and is super tough. The way the skill plays out on live it is essentially an Ignore Pain that can also move you. For the most part it is better than Ignore Pain, making not only Ignore Pain unattractive, but also the other Leap Attack runes. In 1.0.5, if you want a defensive cooldown - grab Ignore Pain. If you want to leap into the thick of battle and be super tough, take Iron Impact.

Demon Hunter:
In the case of the demon hunter, the class is a bit too binary. If you're playing a glass cannon Smoke Screen build, then you're invulnerable most of the time, and when you make a mistake, you die instantly. If you're using Shadow Power - Gloom with a legacy Natalya's set, then you have near constant uptime of 65% damage reduction, but if you're not using the legacy Natalya's set, Shadow Power - Gloom is a luxury.
Independent of the general defensive skill nerf, we had already decided to buff Shadow Power to last longer. The primary purpose of Shadow Power is to give you a short window of time during which you can unload some damage to recoup some Life. Unfortunately the 3-second duration makes this awkward to use. We are changing Shadow Power from 20% Life Steal for 3 seconds to 15% Life Steal for 5 seconds. This should be a modest buff to the skill as well as making it a lot more pleasant to use. All of the runes are scheduled to see similar changes, such as Blood Moon going from 30% Life Steal for 3 seconds to 25% Life Steal for 5 seconds. Each rune effect is slightly smaller, but for 5 seconds instead of 3 seconds, resulting in an overall buff over the duration of the effect.

Taking into account the across-the-board nerf to defensive skills, Gloom will become 35% damage reduction for 5 seconds.
This developer journal is focused primarily on defensive skill changes, but because the change to Gloom is significant, I want to mention that we are looking at concrete mechanics changes to the demon hunter to introduce new play styles. Many players have mentioned that outside of Gloom, demon hunters seem to lack defensive options. More importantly, demon hunters would like some different play styles, and we agree! Here are a few changes we are adding for demon hunters in 1.0.5 to open up new ways to play:
We are adjusting some runes and passives to provide ways to increase survivability that scales with your Life, Armor, and resistances.
We are changing the Spider, Boar, and Wolf companion pets to be actual pets that can tank for you like a Gargantuan or Zombie Dog.
We are putting a short cooldown on Sentry, but you can have two out simultaneously. On top of that, the Custom Engineering passive will let you have a third Sentry turret! This opens up a whole new play style for the Demon Hunter of establishing a "nest" that you can draw enemies into.

Monk:
The strongest monk defensive skill is One With Everything. We've mentioned it before and it bears repeating - this is something we would like to fix someday, but we're going to take our time. Changes to One With Everything heavily impact existing monk gear. We still plan on addressing this in the future but will do so in a way that does not invalidate the gear monks have invested in.
Resolve: Damage reduction reduced from 25% to 20%.
Seize the Initiative: Changed to grant 50% of your Dexterity as Armor. This will result in anywhere from 750 to 1250 armor for most monks (depending on your Dex) which is comparable to the mitigation lost by other classes. The reduction to Resolve and Seize the Initiative should mean if you want to be a “super-tanky monk” you can still take all three defensive skills, but it should be a lot easier to pick some other passives without feeling like you’re going to blow up at the first Elite pack you encounter.

Witch Doctor:
Jungle Fortitude is being reduced from 20% to 15% damage reduction.
Wizard:
Energy Armor: Armor increase reduced from 65% to 35%.
Energy Armor - Prismatic Armor: Resistance increase reduced from 40% to 25%.
It’s worth noting that we’re going to provide additional alternative defensive options for the wizard such as adding flat melee damage reduction to Ice Armor and creating a Familiar variant that provides passive Life regeneration.

Alright, so let's recap. Defensive skills are taking a hit in 1.0.5, but incoming damage from monsters is also being reduced. Taken together, the changes mean Inferno is going to be easier. For some of you this is totally cool; you welcome an easier Inferno because it’s about efficiency and not difficulty. For others, you may be skeptical but you're at least intrigued at the possibility that you'll be able to drop some defensive skills and discover some new builds. However, for others, Inferno is currently already too easy. Maybe you don't use any defensive skills; maybe your gear is so good you dropped War Cry - Impunity weeks ago. For this last group you may be wondering "Another Inferno nerf? But I crave more of a challenge, not less!"

For people in this last group, 1.0.5 is bringing the "Monster Power" system. The details of this system will be outlined as we get closer to 1.0.5, but in short this is a callback to the Diablo II ”players X” option, allowing you to increase the level of challenge for increased rewards. Our hope is that we can make Inferno easier while simultaneously providing new ways for top-end players to gauge their increasing power in tangible ways.