Absolutely. Strategically, it might have been somewhat inept, but morally, it was completely in the right.
Somewhat inept? Uh yea no. Talk about being extremely inept.
The moral side is very much up to debate, it greatly depends on who's morals we're using to judge the situation. Me, I say that the mages were better off in the circles since they are susceptible to being possessed by demons and thus need to be protected and have the world protected by them. No the circles weren't the best thing in the world, but for most mages they were better than the alternative of being forced to live in constant danger of being killed by 'friends', family, neighbors, random peasants that happened to be passing by, possessed or any number of other things that could go wrong.
The way I see it, the mages of the Dragon age univerese are much like the men that can channel in the Wheel of Time. Until the Dragon Reborn
came along, all men were to be rounded up by the Aes Sedai(Literal Translation means Servants of All, but that's not the case by a long shot. All Aes Sedai in the 3rd Age are Female) and 'gentled' because the Male half of the one power was tainted by the Dark One, because otherwise they would go mad and kill those around them by channeling. Then the Dragon Reborn came along and created the Ashaman, a male equivalent to the Aes Sedai. What's curious to note is that there were far more men who could channel than had been found by the Aes Sedai and all of their hunting for men who could for the past 300 years or so.
Yes some men still go mad, but they are at least are carefully observed and before they do go mad completely they are killed off so that they cant cause harm. Also at some point the Dragon Reborn cleanses the taint from Saidin(The male half of the source). And with that men who learn to channel no longer have to fear going mad, and thus the world as well.