My memory from when I started going to them in '65 was that they were very hip places - the dancehalls were full of mods, but what they used to call the underground ( ie those in the know ) were picking up on Dylan, Baez, Buffy Saint Marie, Davey Graham & acoustic blues players like Sonny Terry & Brownie McGhee; to me, this all had a compelling 'authenticity' compared with mass-appeal music, & folk clubs were certainly far less aggressive places than the dancehalls, at least in Reading, where I lived, & our local level of musicianship was very high
    by the 70s, my recollection is that they were becoming a bit more factional ( eg trad vs contemporary ) & that they were a bit old hat - & I don't think the likes of Steeleye Span in the charts helped the cause any ..