Dumbledore knew that Voldemort had cursed the Defence Against the Dark Arts teaching position. So, hiring DADA teachers is knowingly putting their lives at risk. Did Dumbledore make a mistake by continuing to hire DADA teachers?
Dumbledore had a strong suspicion, though not absolute knowledge, that the post was cursed. He also guessed the reason why: in HBP he tells Harry that, after he refused the DADA post to Voldemort, he had never been able to keep a DADA teacher for longer than year. But Dumbledore seems to have discovered the curse by watching DADA teachers, year after year, be forced to leave the school.
Presumably, Dumbledore continued the DADA class for two reasons. First, it was a core requirement for students who were below N.E.W.T. level. Even after Voldemort's initial fall from power, Dumbledore expected that Voldemort would probably return one day, which would place students who could not defend themselves in serious danger. All students needed basic self-defense instruction, especially the future Aurors, whose services would be desperately needed if Voldemort came back to power. (Tonks, for instance, received her schooling and Auror training during the years the curse was operative.) The decision may also not have lain with Dumbledore alone--if Dumbledore had tried to discontinue the class, the Ministry might have gotten involved, since it would have a vested interest in ensuring that Aurors received their early training.
Second, the same observations that suggested the curse's existence to Dumbledore also suggested that the curse was primarily intended to cause problems for the Headmaster of Hogwarts. It was aimed more at Dumbledore than at the teachers themselves. For the curse to function, the DADA teacher simply had to be unable or unwilling to return to teach for a second year. Quirrell and Barty Crouch Jr. died because of their Death Eater activities (though the exact date of Crouch's death is unknown). But the curse would have been fulfilled if they had left because they suffered a persistent toothache, or disliked the students, or felt a sudden urge to play professional Quidditch. And perhaps teachers in more peaceful times--the earliest days of Voldemort's rise to power, or the first ten years of Harry's life--did leave the position for such reasons. Dumbledore only says that he hasn't been able to keep a teacher for longer than a year, but he does not suggest that every teacher left after some serious calamity. Even Lupin and Snape, who both lost their positions for reasons connected with Voldemort's return to power, suffered neither death nor serious injury during their time teaching the class. Physical and mental injuries seem to have come only to those teachers who made particularly unwise choices.
Dumbledore is a strong believer in choice. He even emphasizes to Harry in HBP that the prophecy made about him and Voldemort would not function apart from their own free will. Obviously, a curse is different than a prophecy, but I think that Dumbledore would likely emphasize the role of choice in fulfilling the requirements for a curse of this kind. Because it isn't an Imperius Curse, no DADA teacher is forced to do anything against their will. As a result, whatever forces them to leave their position at the end of the year will be a product of their own free choices--good or bad.
While Dumbledore did know the post was cursed, the curse does not necessarily mean that the teacher dies. The curse ensures that no teacher lasts longer than a full year in the post.
"Oh, he definitely wanted the Defence Against the Dark Arts job. The Aftermath of our little meeting proved that. You see, we have not been able to keep a Defence Against the Dark Arts professor for more than a year since I refused the post to Lord Voldemort." (Albus Dumbledore, Half-Blood Prince)
As we know, Snape didn't die due to his post as DADA teacher. Also, Lupin did not die until 4 years after leaving this post. Lockhart, Moody (or if you remember not even Crouch died) and Umbridge all lasted out their post too. In fact, Quirrell was the only teacher of this subject to actually die whilst actually still teaching it. So Dumbledore was not condemning these wizards to die, merely hiring them knowing that he will have to do the same again with someone else next year.