Yes, musicals can me made about ordinary folks...A CHORUS LINE, PROMISES, PROMISES, COMPANY, CAROLINE OR CHANGE and many others have, in a word, worked.
The problem with A CATERED AFFAIR, for me, was that the conventions of the teleplay were at odds with the conventions of musical theater. Oddly, it's actually not unlike THE LITTLE MERMAID or any of these other corporate, too-faithful adaptations of popular movies. For instance, they have a screenplay to adhere to because that's what people (or the creators) love, then they have the music to add without disrupting the structure of the story, but sometimes this book/screenplay/play/teleplay hybrid doesn't support the dramatic moment and it can't be changed without disrupting the original source material. As before, I pointed out that the moment when Faith Prince's character is in her most emotional place, she cries out in an agonized howl. Watching this, I thought "why didn't they make a song out of this moment?" but at the same time, structurally, it wouldn't fly if there was a song there because later, Tom Wopat enters and delivers an anguished song. Two songs of anger and sadness back to back? They'd cancel each other out. I suppose if A CATERED AFFAIR were an original book, the writer could have made the moment into a two-scene going into a duet, but...Chayevsky's teleplay doesn't do that, so...
It's such a catch-22 because when you go the opposite direction and open up a moment, scene, or idea, it can overwhelm the flavor of the source material. Jerry Herman tried to open up DEAR WORLD from a two set play to a multi-scene musical and--in material that would seem ideal for musicalizing--it didn't work. LaChiusa was chastised by more than one critic for including a song where the "men" (chorus women in semi-drag) sing a number in his adaptation of the all-female play THE HOUSE OF BERNARDA ALBA (another low-key, small piece that bored a lot of people but happened to be my favorite musical of its season).
And I respectfully disagree with you, Jerby that anything can be musicalized. Even Sondheim stated that he felt DO I HEAR A WALTZ? didn't work because it was about a woman who, in essence, "couldn't sing".
Makin' them musicals is a tough, tough business.
"Impossible is just a big word thrown around by small men who find it easier to live in the world they've been given than to explore the power they have to change it. Impossible is not a fact. It's an opinion. Impossible is not a declaration. It's a dare. Impossible is potential. Impossible is temporary. Impossible is nothing.”
~ Muhammad Ali