Another way to look at it...
Boss hits for 100k. In 50 swings, the Night Elf racial should reduce your damage taken by 100k at some random point.
Boss does special ability that hits for 800k. The Dwarf racial lets you reduce the damage taken by 80k since you can choose when it takes effect. Even though this was less damage reduction, an attack that a hit that is for 100k is far less likely to kill you than a hit for 800k. The ability to choose when to take less damage is extremely valuable because it may mean the difference between living or dying. Over the course of an entire fight, the Night Elf racial will probably reduce the total damage taken by more. However the Dwarf racial would more likely have an impact on whether or not the tank dies.
"In anything, if you want to go from just a beginner to a pro, you need a montage." /w TankSpot WTB Montage for Raiders.