I meant it more as a diplomatic exercise than a purely defensive one. The act of discussing this and having a committee from all three powers working together to design and build it will do a lot to create links and relationships.
Having a joint embassy/neutral ground will then pave the way for further treaties and diplomatic action. It might also serve to reduce friction in the future. Providing a forum where the powers can declaim about the underhanded behavior of the others hopefully without shooting. A place where government sanctioned trade can occur with official oversight.
It also adds some faux legitimacy to the Federation, Klingons and Romulans as the de facto great powers of the quadrant. A not so subtle reminder to the Cardassians that they don't get a seat at the adults table.
I will admit part of the appeal I see in the idea is kicking over canon even more so than this quest already has. The other part was a mental image I had of an Andorian, a Klingon and a Romulan news anchors hosting the Alpha Quadrant News Service. Each of them trying to stick to the approved script while taking subtle digs at each other.