Technically, you should have a big enough army on every border to defend your important borders -- say, continents -- from attack. But even more important is to have a big enough army on the attack to destroy your enemies. If you need to strip some borders to get an army big enough to win your critical conflicts, then you need to strip those borders, it's as simple as that.

But if you're going to strip that border, don't spread yourself out into a few small armies; those will all just get rolled over sequentially. Instead, cluster your forces in a single, strong, critical position; a good spot is often an internal country that borders on every possible avenue of attack. Nobody can attack you and hope to hold what they take unless they destroy the army you've just built, so you deter an attack by anybody who cannot build an army large enough to destroy your cluster. It's not as good as defending at every point -- after all, you need to reconcile yourself to losing a continent -- but it does mean that you can counterattack, restore the situation, and deal a sharp loss to any opponent who doesn't dramatically outweigh you. And sometimes, if you want to win, it's your only choice.