If I have a ship with outmaneuver and I am outside the firing arc of the agility 1 ship. When I fire does my opponent get to use 3P0s ability and declare 0 because he can still roll his 0 defense die or do I shut that ability down by reducing his defense dice to 0?

C3PO is conditional on a die being rolled. You have to have at least one to trigger his ability. If none are rolled, he could always pick zero and get a sure thing. C3P0 must roll at least 1 die for his ability to work.

It is the same logical argument that affects abilities that require you to reveal your dial, but then you get ioned.

Ah I didn't realize it specifically said one or more. That's how I interperted it to work but some people think 0 means you are still technically rolling.

If threepio didn't specify 1 or more dice, and instead just said "before you roll defense dice", then he could have been used with zero dice. But because FFG included a line specifying a particular range he can only be used in that range.