Armor shouldn't necessarily be entirely composed of metal. There's padding, straps, etc. So it should be less than it's weight in mithral. Doesn't stop the D&D economy from being FUBAR though.
Costs less. As in, you hand me a hunk of metal, I forge it, attach the various straps to it, hand it back to you, and then pay you because I took something of value X and gave you something of value Y where Y<X.