I've come to believe that "folk music" is just the collection of lyrics and melodies that a particular group of people sing, play, and maybe even dance to in their special time and place.(and their style of performance, too). Who and where the material comes from never makes much difference, people keep what they like and can share-

These wonderful groups that you have, where you sing and play together, there was never anything more authentic or traditional than that--just people who liked each other getting together--it doesn't really matter what you sing and play--it never did, what matters is that you do sing and play together.

The real demise is in the disappearance of singing-- Once, and not that long ago, people sang together as they worked, as they played, and even just as they walked together in in the evening. Now people only sing in church, and most people don't go to church-- Our voices have been drowned out--and most of us are usually reduced to singing along with the radio or stereo.