If balanced funds keep one from being tempted to tinker with their portfolio all the time, than the potentially extra taxes may be worth it. If you're in a low tax bracket, then the dividends and STCGs aren't as much of a big deal...if having a balanced fund masks the volatility from you and prevents you from selling low...it makes sense.
I'd say that VBIAX , VSMGX, VWENX, MAPOX, DODBX are all reasonable long term holdings in the balanced categories. As long as you pick a firm that runs the fund by committee, I'm okay with it. No investing with superstar managers, in that case, you'll need to pay more attention to it and see what happens with succession plans and such.