So using the Red Dragon, model, there is a threshhold below which a round cannot penetrate the tank at all and the KE weapon will not fire on the target. Once the penetration exceeds the threshold the gun can fire causing crits and adding aggregate damage to the target'e health bar. This can represent partial penetrations, spalling or things falling off the inside of the tank. Range, weather, angle of impact, intermediate barriers, barrel wear and faults in the construction of the projectile or armour call all lead to variations in the penetration capabilities of a round. Having a health bar that reflects that it took 1 hit or 10 hits to finally kill the tank is quite reasonable, especially with all 10 hits having the potential of causing crits.
So basically no, the health bar is a great idea and is fine as is. In the interest of keeping the system specs down I would be happy with a repeat of the Red Dragon damage model.