Can depend, to an extent, on the sort of sweater. For example, I think one can wear a cardigan somewhat longer than a pull-over sweater.
In general, for pull-over sweaters, I want them to come down to at least my belt (or where the belt would be, if I'm not actually wearing a belt). At least. If the sweater can't make it down that far, it's absolutely too short.
A little longer than may well be preferable.
If I'm wearing a sweater under a sport coat, I'll probably lean toward a relatively short one (but still not so short as to fail to hit the belt line). Whereas a casual sweater worn without a jacket could go a little long.
I can't honestly say that I ever consciously judge the length of a sweater, though. It's one of those things where I can put it on and just look at it, and know if it's okay, without having to consciously apply any actual test of length. Sort of how I don't need to consciously apply rules from color theory in order to tell if a particular tie goes with a shirt. The pre-conscious thought reaction is likely more reliable than carefully reasoned, left brain decision-making.
FWIW, a sweater is one of those articles of clothing where I'd be far happier with it a little too long or large, than with it being a little to short or tight. Ideally, it should be neither too large, nor too short, of course. But with a sweater, if you simply can't get a perfect fit, better to err on the large side. Sweaters don't necessarily look bad when they're a little loose-fitting, and sweater sleeves can often be worn folded up at the cuff. Well, when you get right down to it, I suppose most types of men's clothing - if they can't fit perfectly (which is always best) - are better slight too long or roomy, than they are too short or tight. But particularly when it comes to sweaters.