Hopefully I don't get harrased here for giving an opinion
The ring itself is just straight up, honest damage reduction, both physical and magical.
It's also not your only source of damage reduction, so you stack it on top of other forms of damage reduction, there's a lot of them
Evasion, shields, armor, utility, buffs and debuffs, sustain. All those things are enhanced by the ring of tenacity.
It's kind of the same logic for the warrior Hold fast ability (3-6 armor) and the warden's Barkskin ability ( 0-150% of her level, it goes up to 0-45 armor at level 30)
Even if the Warden blocks significantly more damage, the warrior gets more benefit from the extra armor since he has a passive shield to back it up