To me it sounds good when the music can have a deep effect on me. When it sounds exceptional, then you will have shivers when you hear the song next time coming up even on TV or on your phone - even a low quality playback will be enough to recall the experience and bring you back to when you heard the song "for the first time for real".
Of course, this cannot be true for every music we play, as let's be frank - most live music is quite mediocre. Recordings take a notch (or several notches) down from there.
Yet, when you have a life changing live performance or song that talks to your soul, even taking that notch down is still a much more fulfilling experience than a whole bunch of mediocre live shows. That's how I know when a stereo system sounds good. Just forget about mesurberating. You will instantly know when the system sounds good. People will look as if they got an adrenaline shot or are just back from a trip to a different universe. When you need to reason the qualities, then there's always room to improve.
In short, when you get a Life Changing Experience, then it sounds good.