The idea, from the looks of it, behind this change is that Blizzard's saying, "We're not sure how to fix block capping, so the best we can do for now is reduce how powerful it is to do so." At least, that's my reading. I've been known to read Blizzard's motives poorly before. 4.2 is still a ways away, and there still could be a nerf to our block chance on the horizon. I cling to hope, regardless, that perhaps this is the harkening of a new -- sanctioned -- block capping era.
Holy Shield and total damage reduction
That said, let's actually talk about the meat of the change, yes?
The single biggest benefit of the new Holy Shield is this: It's extra damage reduction when you want it, with a very short cooldown. This comes at the expense of more damage across the board and, thus, diminished total damage reduction (TDR) -- but honestly that is more than fair.
When it comes to cooldowns, the most beneficial way to handle them to pop them preventively when you're about to take a serious hit. Sloughing a large percentage of some tank-killer is infinitely better than eating the full brunt of the hit and then popping a cooldown immediately following to make it easier for the healers to scramble to pour mana into your near-corpse.
The easiest way to make your healers go OOM is to take large amounts of unnecessary damage so that they panic and immediately remedy with cooldowns of their own and high-cost spells, before a followup attack from the boss smears your congealed remains across the floor. (Meloree explores this concept more in depth at Sacred Duty; do pay him a visit, as he explores the relationship between TDR and healing in a way better than I could within the confines of this particular post.)
So what's the trade-off here? I've seen some folks bandy about the number 6.67% average block value from the new Holy Shield, as if you could quantify the ability through an average value. If you're subscribing to that interpretation, I really need you to abandon it, because that mode of thinking is completely inimical to the optimal exploitation of this ability. Forget about TDR, forget about average block values -- the most important number here is 20%.
Treat it like a cooldown
That is, whenever you activate the new Holy Shield, you're bestowed an immediate boost of 20% block value, putting you at an amazing 50% block value for a short period of time. Thus, you're moving from a model in which you enjoyed a constant damage reduction boost to a model in which you can push out a massive wall of damage reduction to eat away at a major source of incoming pain.
We must remove ourselves from the old Holy Shield and the idea of having a constant block value boost, though, as the pursuit of that could encourage suboptimal play. Instead, this is not the kind of ability you want to macro to Crusader Strike. You want to be very particular when it is activated, to get the most optimal boost from it.
Consider for example, the Nefarian add tank. The single most dangerous part of the single most dangerous phase of the fight for that noble soul isn't when he or she is dragging a flotilla of skeletons around the chamber, eating the regular melees of the adds. Rather, it's in that moment when Electrocute strikes and the tank is looking at a massive spike on top of all that regular damage.
The best way to survive those adds isn't to pop your cooldowns like clockwork as you circle the track, hoping for a low average damage intake; rather, it's to time them for those spikiest moments, when your survival is most in doubt. The premise of coupling a boost to your physical damage reduction via this iteration of Holy Shield with a boost to your magical damage reduction via a glyphed Divine Protection is incredibly powerful.
For anyone who tanked at the start of Wrath, you'll probably intimately recall the derision that was poured upon death knights for how overpowered there were when tanking three-drake Sartharion. Why were they so potent against that hard mode fight, to the point that it was considerd just about impossible unless done with a death knight? Because of cooldowns! They had a cooldown for every spikey moment across the entire duration of the encounter, something no other tank could boast, and they could time them to never have any moments of imminent doom. Their cooldowns made it a cakewalk.
Seriously, it's a buff
As paladins, we are rapidbly approaching a future when we will be the new cooldown tank. When all you have is a hammer, every problem looks like a nail. When all you have is a wonderfully diverse tool belt of cooldowns, every boss ability looks like an afterthought. That, my friends, is the path to once again being considered the most OP tank. Prepare yourself for it.
Granted, I do understand the unease over losing a constant 10% block value. At first look, that does seem like a substantial nerf. However, if my ranting over these last, many paragraphs has conveyed anything, it's that I strongly believe any trade in damage reduction of non-generally life-threatening damage for increased reduction of scary time-to-die damage is beyond a fair trade.
Likewise, this loss of consistent, smaller damage reduction will not make us a spikier tank, as I've seen asserted in several places. Since Cataclysm began, we've been the tank with the smoothest incoming damage levels, even before block capping (though, obviously, even more after). The only spikes we can expect is for lower damage intake on those bigger, life-threatening hits -- basically, a good kind of spikiness that endears us to healers even more than usual.
If there's one takeaway from this whole thing that I would like to emphasize the most, it's this: The best tank is one who uses cooldowns intelligently when needed to best reduce the most deadly, incoming damage. This change facilitates this playstyle in spades. That alone is why the proposed 4.2 Holy Shield change is, above all, a buff. Do not fear it.
The Light and How to Swing It tries to help paladins cope with the dark times brought by Cataclysm. Check out our protection 101 guide and our suggestions for protection paladin addons.