And why a 4 man squad should have 8 man worth of durability?
I mean, sure, if we up their price to 500mp we can go with it.
And why a 6 man Shocks squad will be 12 man worth of durability? guess Shocks will be now 750 manpower. Pretty much the same argument.
Anyway. I do not think it is a bad idea for them to get "armour upgrade". Shocks get armour to engage closer range engagements and they are an elite unit although doctrinal. It would be fair to the extent that Pzgrens get some "body armour protection" upgrade (so it will cost around 60 ammo, will lock out Pzshreks) since it is an elite unit, it is meant to carry engagements.
Panzergrenadiers, so it will have either the choice of carring AT or AI engagements.
Reasoning being, the fact that Wehrmacht is highly unlikely going to get non-doc 5 man squad is due to 2 reasons. They will excel in firepower and survivability destroying balance.
Their main issues is survivability overall because they have a hard time maintaining firepower in mid late game.
Just increasing their overall survivability will decrease their chances of being wiped will be thinner if they have the alternative to purchase armour upgrades.
I think the armour value should be around 1.5 max. Anything higher makes it like Wolfenstein unit upgrade or Iron man.
Maybe grens should have something similar but maybe around 1.1-1.3, but as you said, they are not meant to carry engagements, so no armour for Grens.
Grens should maybe get "defence training", where their received accuracy behind cover multiplier is improved. Nothing OP, nothing too strong but to help improve their style of defensive play and improve their suvivability.