I wouldn't say squish as much as splat. As in "fine, fine, fine, splat". Learning how to deal with large damage spikes that can take you deep red in your health is part of being /SR. That includes learning or getting a feel for why you took a big hit. Did the Boss/EB/AV get lucky and no real worries or did the DE drop a quartz or the Nemesis fire off Vengeance after which your soft cap is no more and doing 'nothing' will rapidly get you dead.
IO set bonuses should not, in general, be used for defense. For me there are two overall routes with sets. Add health and regen OR add recharge to the build