What makes a book "good" or "bad"?

I apologize for another cross-post, but I am really curious about your thoughts on this. I'm afraid I'm a little bit rant-y on the subject - I'm not even really clear (as you will see) where I come down on this subject. Though in the end I think it's up to the reader. Here's the post:

I finally listened to the “Summer Reads for Kids” episode of On Point that aired earlier this month. Visit the website to listen to the interview: http://www.onpointradio.org/2010/07/summer-reads-for-kids. It’s a great discussion which raised a lot of questions for me.

The Hunger Games by Suzanne Collins came up in discussion. Interviewee Pete Cowdin felt that, though he enjoyed it, he considered it a “guilty pleasure” but not necessarily a good book. Theoretically I can see his point (though admittedly I really enjoyed it) but does that mean that all guilty pleasure books are inherently bad?

Huge blockbusters influence the entire publishing industry – we’re wading through mountains of paranormal romance novels about girls dating vampires, werewolves, zombies, pixies, demons, etc. I get irritated at the huge stacks of Twilight in big bookstores while so many other books aren’t getting much attention, or even a space on the shelves. Big sales certainly does not mean good writing and exemplary literature. But what is the criteria of great literature? I have my own ideas of what works for me, but that doesn’t mean that I know what deserves to be labeled a good or bad book. And if readers are to make up their own minds, is there really any use in making this distinction?

The market influences writers, too. I can’t imagine that SO MANY authors just happened to be writing about vampires in time to jump on the Twilight bandwagon – not that I blame them for doing so. In the NPR interview, Esme Raji Codell expressed the sentiment that children should come first for the author, not the marketplace. I agree: if every writer catered to the whims of the marketplace then publishing would stagnate – there would be no growth, no freshness. But if our readers are salivating for more indulgent, guilty-pleasure stories, how bad is it for us to indulge that desire if that is what we truly want to write?