The purges were a popularly supported response to genuine threats and infiltration. They were not a misunderstanding, but they did exceed initial expectations, which is why they were stopped. As for Hitler (and the rest of the fascist movement), the Soviets (Stalin included) absolutely despised him. That's why the Soviets spent the 1930s ramping up industrial production as quickly as they could, and trying to form an anti-fascist coalition with the west (which the British and French tanked).

Stalin was said to have "obsessed over quantitative and qualitative" improvements in arms in the years leading up to World War II, and had soldiers stationed on high alert, preparing for a German attack. Despite the insistence of many Generals to muster forces on the German border, it was Stalin's insistence that forces not be so concentrated that prevented the Nazis from totally routing the Red Army, enabling the greatest counteroffensive in history.

Hitler himself was quite honest at times, to himself at least:

How can such a primitive people manage such technical achievements in such a short time!

...

The fact that Stalin has raised the Russian standard of living is unquestionable. People don’t go hungry [at the moment when Operation Barbarossa was launched]. In general, it’s necessary to recognize that they have built factories of similar importance to Hermann Goering Reichswerke where two years ago nothing but unknown villages existed. We come across railway lines that aren’t even marked on our maps.

Statesian journalist and activist Anna Louise Strong actually met and spoke with Stalin, writing down her impressions:

My first impression of him was vaguely disappointing. A stocky figure in a simple suit of khaki color, direct, unassuming, whose first concern was to know whether I understood Russian sufficiently to take part in discussion. Not very imposing for so great a man, I thought. Then we sat down rather casually, and Stalin was not even at the head of the table; Voroshilov was. Stalin took a place where he could see all our faces and started the talk by a pointed question to the man against whom I had complained. After that Stalin seemed to become a sort of background, against which other people’s comments went on. The brilliant wit of Kaganovich, the cheerful chuckle of Voroshilov, the characteristics of the lesser people called to consult, all suddenly stood out. I began to understand them all and like them; I even began to understand the editor against whom I had complained. Suddenly I myself was talking and getting my facts out faster and more clearly than I ever did in my life. People seemed to agree with me. Everything got to the point very fast and smoothly, with Stalin saying less than anyone.

Afterward in thinking it over I realized how Stalin’s genius for listening helped each of us express ourselves and understand the others. I recalled his trick of repeating a word of mine either with questioning intonation or a slight emphasis, which suddenly made me feel I had either not quite seen the point or perhaps had overstated it, and so drove me to make it plainer. I recalled how he had done this to others also. Then I understood that his listening has been a dynamic force.

This listening habit dates back to the early days of his revolutionary career. “I remember him very well from the early days of our Party,” said a veteran Bolshevik to me. “A quiet youth who sat at the edge of the committee, saying almost nothing, but listening very much. Toward the end he would make a few comments, sometimes merely as questions. Gradually we came to see that he always summed up best our joint thinking.” The description will be recognized by anyone who ever met Stalin. In any group he is usually last to express his opinion. He does not want to block the full expression of others, as he might easily do by speaking first. Besides this, he is always learning by listening.

I highly recommended the book Stalin: History and Critique of a Black Legend by legendary communist Domenico Losurdo. Losurdo's unique method in the book is to use near-exclusively western, anti-communist sources, including Goebbels, Hitler, the New York Times, and so forth to examine not just Stalin, but to explain why Stalin is both so hated and yet so loved. It's a critique of the legend surrounding Stalin.