When does the pursuit of individual happiness become destructive or counterproductive?

The pursuit of individual happiness becomes counterproductive when it strays too far from reality. For example, Gatsby's pursuit of happiness lies in his conviction that he can turn back time and erase the past five years. He believes he and Daisy can return to the moment they first fell in love, as if nothing has changed since then. Even when he meets Daisy's daughter, Pammy, he clings to the conviction they can begin anew. Nick tries to tell him you can't turn back time; Gatsby refuses, however, to give up his dream. Of course, the dream is over. Daisy is married and has a child, and too much time has passed for them to rekindle the old romance in the way Gatsby would like.
The pursuit of individual happiness becomes destructive when it is at the expense of other people. For example, when Daisy runs over Myrtle, Daisy only cares about her own happiness in not being bothered by the death. Rather than stop the car and face that she killed someone, she runs away. She and Tom both run away from the mess they have made of other people's lives, leaving others to clean up behind them.