What's wrong with this reasoning that $\frac{\infty}{\infty}=0$? 
$$\frac{n}{\infty} + \frac{n}{\infty} +\dots = \frac{\infty}{\infty}$$

You can always break up $\infty/\infty$ into the left hand side, where n is an arbitrary number. However, on the left hand side $\frac{n}{\infty}$ is always equal to $0$. Thus $\frac{\infty}{\infty}$ should always equal $0$.

The existing answers are very good; let me give yet another one. 
Consider the counter-argument that ${\infty\over\infty}=\infty$: We have $\infty=2^\infty$, so $${\infty\over\infty}={\infty\over 2^\infty}={\infty\over 2}\cdot {1\over 2}\cdot {1\over 2}\cdot {1\over 2}\cdot...$$ But ${\infty\over 2}$ is infinity, and stays infinity no matter how many times we divide it by $2$. So ${\infty\over \infty}=\infty$. 
This is exactly the same "shape" as the argument you give, but yields the opposite answer; so something must be wrong with this kind of argument.
The problem lies in the "number" $\infty\over\infty$. It hasn't been precisely defined. Now, some of the time in math it's clear what we mean when we write some complicated expression; however, this isn't one of those times. We need to sit down and precisely define what this thing is.
When we try to do so, we'll find something surprising: it doesn't follow the usual laws of arithmetic! For example, consider the following "proof" that $1=2$: $${1\cdot{\infty\over\infty}}={\infty\over\infty}={2\infty\over \infty}=2\cdot{\infty\over\infty},\mbox{ so }1=2.$$ Since $1\not=2$, at least one of the steps there has to be nonsense. The obvious candidate is the claim that we can cancel $\infty\over\infty$. This suggests that ${\infty\over\infty}=0$; however, then we have $\infty\cdot {1\over\infty}\not=1$, which ruins one of the basic properties of division! 
It gets worse: in both arguments, we need to perform infinitely many operations (either infinitely many sums, or infinitely many products), so we need to define how those work. At first glance it seems like limits can help us there, but again, we'll find that there's no good way to define the infinite operations we need which matches with our intuition.
This all points to the following fact:

In order to make sense of arithmetic involving infinity or infinite operations, we need to make some choices in how we precisely define the various operations on infinity; and no matter how we make these choices, some "obvious" properties of numbers will fail to hold.

Picture trying to fit a carpet into a room that's too small. You can maybe get lots of it to lie flat, but somewhere it's going to fold over, or stick up, or crumple. 
