convert is designed to handle a single input file as far as I can tell, although I have to admit I don’t understand the output you’re getting. mogrify is better suited for batch processing in the following style:
mogrify -path ../dsc_small -define jpeg:extent=2MB dsc_big/*
But honestly I consider it dangerous for general usage (it’ll overwrite the original images if you forget that -path) so I always use convert coupled with a for loop for this:
for file in dsc_big/*; do convert $file -define jpeg:extent=2MB dsc_small/`basename $file`; done
The basename call isn’t necessary if you’re processing files in the current directory.