The blue tunic is rather useless, because, having the Red one does almost the same, because you kill most of the enemies before they even touch you.
The best defense is a good offensive
The only majaor letdown I see in LADX, is that when you get the red tunic and level 2 sword(can be done pretty soon in the game), you are a walking tank that destroys everything in a couple of slashes, even bosses