If you were to localize the entire population, you'd have unheard of levels of pollution over that settlement, and since it would be completely focus, there would undoubtedly be a terrible effect on the atmosphere. Sanitation would basically go out the window, as would any sense of management. Finally, and most importantly, one disease could sweep through the entire population without a problem. That many people in close proximity? Viral/bacterial paradise. If one of those people had MRSA and it started spreading, you could say bye-bye to the human genome.