We call that day good on which Christ died because by His death He showed His great love for man, and purchased for him every blessing.
On Our Lord's Passion, Death, Resurrection and Ascension - Baltimore Catechism
This reflects the most common and appropriate answer among Christians.
While Christians reflect deeply on what Christ endured and the great sorrow of that day, all generally agree that what is truly important about that particular Friday is not what men did to God, but instead what God did for men. God, perfectly innocent, sacrificed Himself and his own life in order to save us from the worst possible fate because of his love for us. There is nothing, not even our own individual conception, for which we should be more thankful. This is the source of every blessing.
So a template answer might be:
I call it Good Friday because, though it is a very sad day, it is also the day that Jesus, because of his love for us, saved us from the very worst possible sort of death, and through this sacrifice purchased everything that is good. There is no other day that I am more thankful for, no other act or day that is more Good.
The intensity of the language can be toned up or down as you see fit, though. Or more briefly:
It's the day that the most Good person ever did the most Good thing ever.
As for the history of how this phrasing came to be, we're not so sure. The Catholic Encyclopedia says:
The origin of the term Good is not clear. Some say it is from "God's Friday" (Gottes Freitag); others maintain that it is from the German Gute Freitag, and not specially English. Sometimes, too, the day was called Long Friday by the Anglo-Saxons; so today in Denmark.