Did I overreact? Was it worth it?

You did not overreact. Talking about people like that is not cool. While I don't know if this 'friend' of yours is really a friend, or if your secrets are safe, what I do know is this. Remember this. Write it down. YOU ARE THE BETTER PERSON! Not a shadow of a doubt in my mind, no questions asked. It takes a better person to not say something unkind about someone else, especially when everyone else is. You went even further than that and told her that she shouldn't be talking about him, and you defended him. It takes a very strong person to do that--don't ever doubt your strength of character, your values, or your strength as a person. Good for you! You don't need to worry about whether this girl will remain a 'friend'. She doesn't sound like a person who'd make a very good friend anyway. Trust me you are a better friend than she ever will be. If I had to choose between the two of you as friends, you'd have my vote hands down!