Yeah I thought about that too. But it doesn't explain where all the armor ultimately went though, look at the screenshots:
http://imgur.com/a/YBYC6 (I can't upload it directly, says the files are too large)
Also this guy: http://i.imgur.com/biYXfT9.png The only other survivor of my most recent debacle, came back wearing his armor, so it definitely wasn't destroyed in combat. But when he got out of the med bay Poof, no more Wolf Armor.