God did not declare his creation to be good on the second day, but he does so twice on the third day. In Rashi’s commentary on verse 7 he attributes this to the creation of the waters/land not having been finished on the second day. Friedman, on the other hand, argues that the reason he does not call the structure created in verse 2 good is because he would later choose to break that structure in the Flood story.
It is worth noting that the Greek Septuagint DOES say that it was good on the 2nd day, but neither the Targum Onkelos nor the Masoretic Text do. It has been argued rarely that this was originally present in the text, but given the shortcomings elsewhere in the Septuagint it would be tough to make this case based solely on its testimony. The Samaritan Torah, for what it is worth, also lacks the declaration that it was good, and it developed along a different course than the MT (although it is arguably the least trustworthy document so far listed, its alternate history of development weighs against the Septuagint’s rendition).
Targum Onkelos: And the Lord called the dry land Earth, and the place of the collection of waters He called Sea.
Rashi: He called seas: But is it not one sea? However, the flavor of a fish that comes up from the sea in Acre differs from the flavor of a fish that comes up from the sea in Spain. — [from Ekev 39]
Rambam: God differentiated the “dry land,” by giving it the form of habitable earth, from the water to which God gave the form of the “sea” which contains water. God confirmed them in their existence in God’s will.
Ibn Ezra: God had already named the dry land “earth” and the gathered waters God had named “seas,” and God had understood that it was good. Thus God had already completed the work of the second day.