As others have noted, the problem appears to be that it was a "singers' night"--just about everybody there was planning to sing at least one song themselves--and probably preoccupied with their own upcoming performances.   Maybe even mentally comparing their own songs to what had gone before.

The thread title implies a broader question:    do singers make a good audience in general?

I'd expect the answer to that question is:   absolutely.

As long as singers feel no personal pressure to perform later, they'd be an excellent audience;    very appreciative of the song selection, possibly looking for songs they can add to their own repertoires, noting the stage patter, performance style, etc.   More than willing to sing any chorus the performer wanted (in my area, loaded with singers, the problem would be to get them to not sing along--and very likely throw in harmonies on the chorus-- and they might feel frustrated if given no chance to join in vocally.)