That's the key. In English this reflexive construction is only used while talking about abstract or metaphorical locations, e.g. " I find myself to be in a bad spot"; what is meant by such a phrase is roughly " I consider/think myself to be in a bad spot". You just don't use that construction to talk about actual locations as in "Where do you find yourself?" "I find myself in London". However in other languages, such as in Italian, such a construction is normally used to express location. While i can't be sure of this, I deduce that the reason Duolingo doesn't accept this same construction used in English is because the meanings are distinct. German has it, like Italian, but English does not.
Really? How so? In English, a reflexive construction can be used metaphorically, but it need not be. E.g. "by the nightfall, we found ourselves in an unfamiliar part of town" is quite literal: we actually are where we say we are. So not accepting it as a valid translation is plain rubbish.
EDIT: Thinking about this a bit more, I tend to agree with the comment by JackBond below. More specifically, I can't think of a situation where I would naturally use "find myself/ourselves in ..." to describe a location in the present tense. Using it in the past tense is not so unusual, but it has a slightly different meaning of "ended up in ..." (rather than "was/were in ...") -- just like in the example I gave above. And as for being unnatural/narrative, were I to tell the story to my friends over a beer, I would probably use "ended up in...", but in writing I would certainly favour "found myself/ourselves in..."
That's still a more unnatural, narrative type of voice in English, whereas the German reflexive construction is not that at all. As naturally as you'd say "We're in an unfamiliar part of town," a German might say "We're finding ourselves in an unfamiliar part of town," but that would sound a little awkward in English. Acceptable, but awkward, and therefore not in the spirit of this translation.
While agreeing with many comments here I have heard it used. Some of my friends like to mix things up a bit during speech. Add a little color to the conversation. Perhaps Duo should accept some translations with comments such as 'more naturally ... ' or 'more frequently ...' and then show the normal phrase. I have already heard comments going the other way saying 'We don't say it normally that way in Germany' for answers that have been deemed correct. To me, even if it is not the normal phraseology, if it is proper English and others around you would understand what was being said. It should be accepted.
In addition, there is no context for the above statement.
Where do we find ourselves but once again in the middle of a discussion.
Where do we find ourselves but once again at our favorite restaurant.
I have heard both from native speakers,
Thankfully Duo has the discussion feature to clear up these kind of nuances.
Just my 2 cents
I am curious about this well, using "where do find ourselves?" comes off as quite pretentious to my ear in most circumstances (especially in the context of a physical location), and using such an expression for inanimate objects veers into pure absurdity ("where does the closet find itself?").
No. "Sich" is used only with er/sie/Sie/es. All other forms of reflexive verbs require the usual accusative/dative (depending on the verb) forms of personal pronouns, which in this particular case means "uns". Check this page for the detailed information: https://www.dartmouth.edu/~german/Grammatik/Reflexives/Reflexive.html
You need "uns" because in this particular instance "befinden" is used as a reflexive verb meaning that the direct object on which it acts is the subject of the sentence itself. (It has other meanings when it's not reflexive). Compare this to an English example I had given earlier in this thread:"By the nightfall, we found ourselves in an unfamiliar part of town". While it is not an exact analogue of "wir befinden uns...", it illustrates the point: dropping "ourselves" will render the sentence meaningless.
You can read more on reflexive verbs here: https://www.dartmouth.edu/~german/Grammatik/Reflexives/Reflexive.html or just do your own Google search.
Der Weltraum - unendliche Weiten.
Wir befinden uns in einer fernen Zukunft. Dies sind die Abenteuer des neuen Raumschiffs Enterprise, das viele Lichtjahre von der Erde enfernt unterwegs ist, um fremde Welten zu entdecken, unbekannte Lebensformen und neue Zivilisationen.
Die Enterprise dringt dabei in Galaxien vor, die nie ein Mensch zuvor gesehen hat.