The challenge is to beat all the fleets. The requirement is to just beat the grand armada or supply fleets. I'm not sure why you're not getting this. The player can't fight all the fleets sent their way even if they want the challenge. The remaining fleets are pointless as they aren't relevant to the defense of the armada or supply fleets, the player can't fight them in one go, and they tend not to even try for revenge when the player beats the main fleet.
The only thing they achieve is spooking new players into not wanting to play the game.
And fighting them a fleet at a time can drain a lot of rep through a bunch of -5s (if I fight them while unid'ed). Also, until the crisis ends, the fleets need to be totally wiped out just to be sure; no auto-resolving the strugglers if there are few enough for the player to kill personally. (Hopefully, they all run now instead of survivors hanging around permanently until killed after end of crisis like in pre-hotfix release.) The rep drain is an annoying thing about them. If I rush colonies like in old expedition releases, I will fight the League with a weaker fleet not capable of handling more than one or two fleets at a time. I can lay low and avoid other major factions until at least size 5, but League comes much sooner (before I can assemble a fleet that can comfortably kill 250k strength bounties).
The player can't fight all the fleets sent their way even if they want the challenge. The remaining fleets are pointless as they aren't relevant to the defense of the armada or supply fleets, the player can't fight them in one go, and they tend not to even try for revenge when the player beats the main fleet.
It is pointless if the goal is one fight with all of them. If the goal was two or three massive fights in quick succession, like a boss rush or multistage boss, then the enemy would need more fleets than mercy would allow. Of course, the combat goal is probably pick off those supply fleets, but like those two pirate fleets guarding the gate in the tutorial, it can be so bothersome to separate the fleets that just fighting anything yellow and angry until they leave is more convenient.
With so many fleets, they should be guarding their worlds or sent to fight the Hegemony, their real enemies, not bullying a wildcard it probably has positive relations with. (If player had vengeful relations with League instead, that Grand Armada should wipe those colonies off the map instead.)
The two are intertwined. Some discrepancies between lore and gameplay are okay, and others ignorable (sat bombing). However, when something breaks both the lore and visible gameplay mechanics and forces you to deal with it, then it becomes a problem for suspension of disbelief and "fairness". Us getting punished for sat bombing but the other factions not getting in trouble for it will always break the latter. While the PL's blockade breaks both.
This is what I dislike about Diktat. (Most are already angry with Pathers, so they do not count.) If Diktat plays with nukes, then nukes should be a viable option on the table for the player too. Either player should get away with retribution nuke strikes or Diktat earns hostilities from everyone who cares about atrocities.
If the Diktat successfully nuked my fuel planet, you bet I will retaliate and wipe Sindria off the map with sat bombing. If the other factions want to pick a fight because of that, they too can join with their Diktat friends - all of them, even the Indies. At least that is what I would feel like doing.