- it is processed as a single unit (typically with altered kerning and leading, or other 'binding' elements to achieve this),
- it communicates a necessary message/idea about the client/product/service,
- it is simple--ala the chinese artist seals or chops
- it gets extra points for being clever
That short list is by no means all-inclusive or authoritative.
That's probably why I so much enjoy hearing others' views on the topic. The link below is from a blog where the author has presented his own simple view of what constitutes a great logo.