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If I had to guess, I think defense is more likely. If the damage cap is a fixed number, then it can be stored on the user's system easily and checked before any damage is sent to the server. Then any defense stat the Ur Dragon shows up with would make that number easier or more difficult to hit.
Still, it wouldn't be much harder for them to make it some percentage of the Ur Dragon's HP. They could have made the damage ceiling a figure that gets downloaded whenever the system loads up an Online Ur Dragon. Or it could be calculated with a formula stored on the system based on Ur's HP. If it were a formula, I'd think the early Ur Dragons would have caused the damage ceiling to be hit very easily. But if were something they continually tweaked on their end, I'd kind of expect the problem to be fixed by now.
I'd like to think that Capcom pays enough attention that someone in the company is aware by now that we've hit the ceiling using legitimate means. But if the ceiling is a fixed number that is stored on the system, they would have to at least go to the trouble of addressing it with a patch, which would be more effort than just tweaking a formula on their end. There could be all kinds of things I'm not considering though, so ultimately it's just a guess that the ceiling is a fixed number and it's Ur's defense that would make that number easier or harder to hit.