It is hard to say what their particular reasoning behind massing over Europe is, other than the fact that they had to mass above somewhere. If they scattered their fleets, that is far more likely to result in the complete destruction of your forces and an inability to expel an incursion than keeping all your ships within range of covering each other.
Tactically, this is called 'mass', and it is a key factor in deciding who will win a battle. Even if the Reapers initially made contact above Australia or China, the fleet would move, as a whole, to bring its full firepower on the enemy at once, as opposed to loosing all of your battle-groups individually as they move independently to counter the threats. This fleet is most likely at some form of battle readiness as well, and not just siting in dry-dock, so to speak.
The fact that the Reaper fleet is so powerful that there was no defense that could have reasonably stopped them does not make the attempted defense tactically stupid or imply that the commander was an idiot. It only implies that the commander was sorely lacking in intel regarding the threat they were facing, or that they were desperate to protect our home-world, either of which are understandable courses of action.