Once a player places all of their men on one territory or continent, they have essentially given up. They are basically giving up the rest of the board to their enemies, and given you ahve enough troops in the locale, you can contain them in their continent.
The biggest disadvantage of doing this is that, for example, if you take North America, you are taking in 8 men per turn. If an enemy takes Europe, he has the option of taking Asia and Africa easily, then maybe even South America. This can pressure you on two or more borders. Your opponent can now make impenetrable borders with you at either Venezula, Iceland, or Kamchatka, containing you, while he goes off to fight other wars. You are gaining no cards for added bonuses, and eventually your opponent's reinforcements will greatly outweigh your own. Game over.