Good taste, to me, is liking what you see and knowing why you like it.

Seth Godin writes in The Practice:

… the ability to know what your audience or clients are going to want before they do.
… watch what the market does and learn from that.

To me, that is too much of a market-oriented view of taste. The second statement also disagrees somewhat with the first.

I don’t think you learn about good taste by observing the market. You only learn what is out there and what the people with the most enormous mouths say about what they like.

Good taste is about appreciation for the specific. The market is about appreciation for the average.