Yes. O'Neill, in his famous books which helped preserve and revive Irish traditional playing, stressed that high quality standards were important to present to those you wish to interest in traditional music. We can literally drive people away from our art form if we encourage bad players to perform on a constant basis. We drive out good new/young performers, too, too embarrassed to sit through 'lame crap' to join the group. Apparently you have wound up in a role where you are in charge of 'quality control' for your local listeners, so you can be seen as 'the bad guy'.

Does the local sports team let an incompetent klutz 'make the cut'? Not above the primary school level. Why then let a tone-deaf singer become a regular performer? The 'kindness' is actually unkindness to the audience, and a fat lie to the performer.

No, perfection is not necessary, nowhere near, and people striving to do good music should not be discouraged; and it is hard to make people see the difference between them and people who truly need to get 'the hook'.

As Barney Fife would say 'nip it. nip it in the bud.' As emcee, don't, out of pity, lead a big round of applause for a disaster, it will not end well.   Applause came about in history for a reason, it is a feedback signal, let it work. Audience members, if you don't like crap, don't applaud it, you just make it grow.