R'Ovadia Bartenura and Rabbenu Bachaya both explain that the Mishna is telling us that when it comes to character traits we should choose the middle path and not go to one extreme or another. This path will be beneficial both to man and the people around him. They give the example of a man who is very stingy and keeps all of his money to himself. He never gives charity and the people around him don't benefit at all from his wealth.This is not the right path as people will resent him and his wealth instead of appreciating it. It will be good for the man himself as he will be even richer because he saved all his wealth for himself but it will be bad for the people around him. On the flip side, if he is overly generous and gives out all of his money the people around him will be very happy and appreciative but in the end this will be bad for him as he will have given away all of his wealth. Although a person should minimally tithe his wealth for charity our Sages tell us that he should not give more than 1/5 of his wealth away lest he become poor himself (the only exception would be an extremely wealthy individual which would be allowed to give more than 1/5). The correct path though is the middle ground so both he and the people around him can benefit from his wealth. This is the "straight path" that one should choose in life.

This principle can be applied to every character trait the person should always take the middle ground. We are generally inclined to take the extreme path that focuses primarily on our own benefit while neglecting others. The opposite does exist though usually, in the family setting. It is very common for women who are mothers and wives to be entirely focused on the well being of their children and spouse (I happen to personally know a few like this :) this isn't the "straight path". These noble women in their pursuit to make everyone around them happy forget to take time to focus on their own happiness as well.