Interesting question. It is a question that I've often asked myself over many years of language learning. I have an amazing accent in the language that I am learning - to the point that when I'm speaking to native speakers on the telephone and then they meet me they state that they didn't realize I was a foreigner. I don't state this to boast, but in fact the opposite, that it has caused me many many headaches. The problem is that since my accent is so good that the locals think that I am absolutely fluent and understand everything that they say. The truth is my vocabulary is limited, so although I speak like a local I can't understand everything that is said to me. Can you imagine someone saying to you perfectly in your own language "sorry, I don't understand what you are saying". You would think that they are taking the micky! I admit that at times I've purposely made my accent worse so that people don't think that I understand everything they are saying. Of course I get complimented all the time on my accent (when I'm not purposely trying to butcher it). But on the other hand I secretly admire those people who speak with a strong foreign accent, as they do not have the same problem as me - i.e. having my language ability overestimated.
What is the balance? Honestly if I could start again I would not care so much about my pronunciation but rather my ability to comprehend what is being said.