What I mean by theatrical is that he.
1) does pretty much for every character a different distinct voice. (And does it very well if I may add, he is able to repeat each voice throughout the 3 books with the same characteristics and nuisances Of each different voice)
2) there is sound affects added during the readings ( horses running, orcs and humans, running, swords clashing, thunder, deeper low ent voices (you would have to hear it to know what i mean). Even when gandalf whistles for shadowfax after meeting aragorn, Gimli, and Legolas in fangorn,) music shire sounds, Rohan music, sounds in Rivendell etc...
you are correct there is not a full cast. but there is so much added extras that make listening so enjoyable.
I'm not sure what you mean by "theatrical" audiobooks. It is not a full-cast dramatization, and Mr. Dragash is definitely adapting Tolkien's book, not the films. But, no, I've never encountered this version before now.
What I do have is:
The Mind's Eye audio dramas of both The Hobbit and The Lord of the Rings that aired on NPR.
The audiobook of The Silmarillion as performed by Martin Shaw.
I once had a copy of the BBC radio drama of The Hobbit, but I long ago donated it to a local public library.
Right now I am listening to the final part of the BBC adaptation of LotR via YouTube to see how they dealt with the Scouring of the Shire.
Dragash's reading of LotR is without parallel. It is a superbly characterised unabridged soundscape experience using excellent sound effects and the music of Howard Shore. He even reads part of the appendix (Durin's Folk). When it first appeared on YT it even included a huge range of relevant images by Howe, Lee et al.
Unfortunately by using the full unabridged text, Shore's score and the imagery it was in breach of copyright so it was eventually pulled from YT although a few enterprising YTubers have re-uploaded the entire audio soundscape again under slightly concealed titles in order to bypass YT censure which makes it rather difficult to find there.
It is a totally immersive experience best achieved with a good set of headphones.
There's a link to it in the Audio Books forum but the following link includes all of Dragash's original audio files including the reading of Durin's Folk.