What makes theatre "good theatre" is, in my opinion, completely subjective. But what makes theatre a special kind of entertainment is its importance on the present moment. Art alone is just that: art. Are with an audience is alive, capable of inspiring, creating, and evoking an audience to change, either themselves or others.
Good theatre should provide a mirror to reality. It should present different perspectives that raises more questions than it answers. It shouldnt present solutions, but force the audience to find them for themselves. Good theatre should explore the concept of living itself: what makes up everyday life and why people do the things they do. Once that is achieved it should challenge people to question themselves and others as well. I don't mean that it should be out to change people's beliefs, ideals, or opinions, but it should force people to know why they believe and do what they do.
Good theatre should never be safe. Life is chaotic, passionate, and unpredictable, and the theatre should act as a parallel to life. Good theatre should be a juxtiposition of itself, varying in tempo, emotions, ideas, etc. It should take the audience on a backwards roller coaster ride. What makes theatre execptional is its ability to draw in an audience, bringing down their defenses with comedy, and then slapping them in the face with tragedy. A particular brand of theatre that I have fallen in love with is known as "In-Yer-Face Theatre:" a no-holds-barred, agressive, brutal, and honest portrayl of life. As Peter Brook said, the intention is to ‘crack the spectator on the jaw, then douse him in ice-cold water, then force him to assess intelligently what has happened to him, then give him a kick in the balls, then bring him back to his senses again.'
Theatre is a communal effort. Very rarely can one put on a complete performance entirely on their own. Along the same lines, theatre should be reflective of the community in which it is created. It should be conscious of communal concerns as well as raise concern for communal consciousness.
Good theatre is a balance between the technical, the vocal, the spatial, the visual, and the emotional lives of the performers AND the audience. One element cannot overpower the other, but each must compliment and combine to empower the performance as a whole. But again, each person will have their own definition of what is and isn't good theatre. It could be painful, but good, enjoyable, but terrible. But what it NEEDS to be, immediate. That is what makes people come to the theatre: the connection formed between the actors and the audience.