To teach a single dogmatic interpretation and to open things up to the point that all interpretations are equally valid are both extremes which don't require any real understanding of the nuance of the text. The proper balance is one of informed individual opinions. If an interpretation is based on factual inaccuracies, misinterpretations, or bad faith, then that interpretation is not valid.

However, this "proper balance" is not a balance between dogma and modern literary criticism. The balance is between dogma and lazy/apathetic teachers. "All interpretations are equally valid" is a strawman version of The Death of the Author, it is not a serious academic position.