If a target audience can relate to the performance, then in my opinion, it is good theatre.
Jenny read that quote at the end when we were trying to define what a play is, and it said something about how a play is the only thing "you can't go to the restroom, can't rewind, turn away from" etc.
I personally believe that this is true. My favorite plays and musicals are those in which I loved every last second of. They captivated and better yet, held my attention for the duration. This is good theatre to me.
The reasons why a play relates, captivates, and consequently is "good", are many. But I personally view it in two major categories.
First off, the most obvious, plays can relate because they hit topics that are common to the viewer. Kind of like a performance about love. Take "Big Love" for example, (I credit Fundamentals of Acting for making me view this lol).
Big Love was a delightful play that was so expansive over the topic of love and the differences between men and women's views of love, that it hit a least some point of familiarity with nearly everyone in the theatre.
Consequently, a good play because the majority of the audience related, and remained intrigued for the duration. We laughed, we cried, we were entertained. Thus, good theatre.
The second category for me are those plays in which are so well developed, that even though the audience doesn't have any personal experience to relate to the performance, they can relate based on solely what has been introduced throughout the duration.
Take Cat on a Hot Tin roof. In no way do I relate to this play. I have no family relationship issues, never had someone close to me die, don't have alcohol abuse problems, (though there has been a party or two ;) ) and have no dark secrets from my past that consume me.
But the story was so well developed that I began to legitimately care about the issues the protagonist was dealing with, and from the other character's points of view wonder, what happened in the protagonist's past.
The script had me intrigued, curious, obsessed, FINALLY released me, and ultimately, I was entertained. Thus, good theatre.