Was Walther too strict warning against the Theater? Part 1

See my previous post regarding a comparison of Walther's quotes from Luther's writings where he vigorously condemned worldly dance. Walther beautifully shows Luther and Scripture guiding against the snares of the world... unlike Ewald Plass does in his book This Is Luther.

But what about the Theater?  Walther had no quotes from Luther in his book against the Theater but Ewald Plass gives comments from Luther that seemingly showed Luther even favored worldly theater.  Walther quoted other theologians, ancient and modern philosophers and a newspaperman against the Theater. But here is what Ewald Plass said concerning Luther's position on the theater, This Is Luther, pages 285 - 286:

ON DRAMATICS 

That the broad-minded, tolerant, and conservative Luther would not frown upon all dramatics and theatrical performances, was to be foreseen. He did not agree with those who found the dramatization of Biblical incidents and stories a profanation. He once pointed out that the Gospel had been diplomatically introduced by such presentations into a section of Lower Germany from which its public preaching had been debarred. (*) But even to secular drama Luther was sympathetic. Upon one occasion he was told of a teacher in Silesia who had given offense to some by proposing to perform before a Christian audience a comedy written by the pagan Terence. Luther was asked whether such (page 286) an undertaking were proper. He answered that the pupils should be permitted to present the drama. Such plays would be of great educational value to actors and audience alike. They are a mirror of life, said Luther. Nor ought Christians be held to avoid them because at times coarse jokes and objectionable love affairs are found in them. If a man insists upon taking offense, even the Holy Bible may give him occasion to do so, was Luther's realistic comment. (**) There was certainly nothing prudish or puritanical about Martin Luther.

(*) K-K, M II:504 [Koestlin, Julius. Martin Luther, sein Leben und seine Schriften, 5th edition 1903. Available from Google Books here.]
(**) Erlangen 62: 336 f. [Erlangen edition of Luther's works]

Here it would seem that Ewald Plass has successfully found an instance where he can prove Walther wrong in his strong warnings against visiting the Theater.  This is where the new, modern (English) LC-MS can really shine for it has proved the old (German) Missouri Synod wrong! Right?

So is Walther overstepping when he warns against visiting the Theater?  Because of the length of this subject, I am continuing it in my next post, Part 2.