Level 1 Marked for Death shout does:
1 point per second health damage
25 point per second damage armor

I've been using it against dragons and it seems really good. I shout it couple times and after a while my arrows seem to do a huge amount of damage.

Does it mean dragons have armor that you can damage?

I have read elsewhere about how mace perk ignore armor was useless because most creatures don't have armor. Was I mistaken in believing that dragons don't have armor?

Dragons have 0 armor, but I'm guessing the shout gives them a negative value and thereby increasing the damage done.

It definitely helps versus dragons, but be careful using it around allies. You can permanently damage their armor.

Marked for death shouts stack - So using it multiple times decreases armor rating further and further - Even down into a negative value (Does that even make sense?).

Another thing that just does not seem right is that the effect is permanent. There are mods that grant Dragos the ability to use this shout. They permanently mess up the players armor rating.

Marked is great for dragons. It is taking their armor into a negative value (as they have 0 armor (sorry mace users)).

The shout turns their scales into the consistency of tapioca pudding.