there's nothing physically inconsistent with a material we think of a stronger (Yield STRENGTH, units of force/area) also having a higher yield STRAIN
don't think of it as "steel deforms more than copper", think of it as "steel can deform more than copper before it fails catastrophically"
http://en.wikipedia.org/wiki/Yield_(engineering)#Typical_yield_and_ultimate_strengthssteel yield strength ~500-800 MPa or more depending on form
copper 70 MPa
edit: the various formulations of steel have very different properties, some of them have seem to have higher strain at yield than copper, others lower, and some can be strained well beyond the elastic limit and reach an even higher strength in a work hardening regime. To complicate further it seems different disciplines define the yield point differently on those more complex curves, some people say the yield point is 0.2% strain by definition, some say it's the elastic limit, some say it's the ultimate limit before catastrophic failure. anyway: Toady's probably not totally off base
In game terms, what I understand this to mean is that the main thing you want is a high Yield Strength in your armor to prevent your arm from getting lopped off (copper fails this test, and steel is quite good). But assuming the armor does not fail, you also would prefer a small deformation to minimize serious blunt injuries. If you want to compare the effectness of steel to other metals against a blow of given force, you probably want to look at the *ratio* of yield_strength to strain_at_yield