An AV has a 10.5% chance to hit, not 5%. The 5% is only for minions. Lts have something like 7-7.5%, bosses are around 8-8.5% if I remember correctly. I'd have to check the purple patch for correct numbers though. The AV 10.5% is correct though.
Let's have some fun with the numbers. Imagine a +4 AV staring you down. With soft-capped defense, that AV has a surprisingly low 10.5% chance to hit you. "Wait a second," you say, "10.5% can't be right!" Believe me, it is. I'll get to why that is later, but for now, just take this in. With 45% defense, a +4 AV will only hit you one time in ten, which is less often than an even level minion will hit someone with 35% defense. Four levels and three rank increases don't compare to 10% of added defense. In-freaking-credible.