Iceland eruption and the massive disruption to global aviation: Is the shutdown really necessary?

Much of European airspace is closed for today at least. Within Europe the scene is casual chaos. Not only are travellers and flights grounded in several major European city, but it will take days to restore schedules, even if the scare is called off today. And in points as far away as Australia and Argentina, aircraft bound for Europe have been grounded too. Is this a massive over-reaction of super-cautious politicians and bureaucrats who are far more concerned about their own liability - while suffering none of the financial carnage that this will cause the airlines and their feeding chain? Or is it a genuinely serious event that justified shutting down most of Europe's airspace.