Thick Chitin gives +1 AC vs Bludg/Slash and 60% reduction,
Chitin gives 40% reduction,
Steel gives +1 AC and 80% reduction,
Ancient Dire Bear or Crocodile leather patches give 2 AC vs Piercing.
TC armour like the above is going to have a flat +1 AC because of the 2 Pierce from the lining. The TC itself isn't giving extra AC, it's just being rounded all together.
In every single other instance, TC and C are going to have less AC than steel, they are not equal. Steel is still useful, I've got just as many characters with Steel/Troll armour as I do with chitin armour.