From the point of view of making it easier to analyse matches, "66% physical damage reduction" is a heck of a lot easier to handle than "66% chance for Vanish to hit in the first place" (or the other possibility, 66% chance to dodge physicals"). On the other hand, the way damage reduction works, 66% physical damage reduction is far more than 2/3 as good as "100% damage reduction" since in most matches you accomplish the same thing: the enemy will use magic next turn since why bother with physicals? So arguably going with the status hit rate version (or perhaps even the chance to dodge version) makes more sense.
I'd disagree with hitting it twice, whatever you do. Hitting it with two 66% effects leaves it at 44% normal effectiveness, which is a far bigger hit than other things receive. Then again I'm generally opposed to anything which nerfs status and buffs more than it does damage.