The key thing about "Watkin's Ale" is to understand that everything has a double meaning. Everything. If you don't see it, you aren't looking hard enough.

Even the title. Why Watkin's ale? "Wat" is of course a perfectly good Middle English name (think Wat Tyler), and -kin is a perfectly good diminutive (for a ballad example, think "Harpkin"), so Watkin on the surface means "little Wat" or "young Wat" or "Wat the lesser."

But "Wat/Wot" also means to know, or to have knowledge or wit. Thus Watkin is, or could be, one of little wit, and Watkin's Ale is, or could be, ale that is dangerous to the unaware.

And an edged tool is a blade or a sword, and a blade or a sword is another name hidden name for the male generative organ, and blade is also one who, er, wields a sword.

And I invite you to think about the multiple meanings of handling, i.e. holding in the hands, a sharp-edged tool.

It really doesn't take a dirty mind to see this -- such things usually pass right over me, and I intensely dislike most rugby songs. All it takes is a mind that is aware of the ambivalency of the meanings of words.

Incidentally, on topics like this, it is worth consulting Eric Partridge's A Dictionary of Slang and Unconventional English. (My copy was given to me by the late Ed Cray, probably because he didn't think my mind was dirty enough!) The very first "unconventional" meaning of "tool" is, in fact, the male generative organ. And this meaning is attested by the sixteenth century. And to grind one's tool, i.e. to sharpen it, is to engage in coitus, although that is not attested as early.

Partridge also documents that "wat" was a nickname for hares, which were famously fecund.

The song has actually acquired more dirtiness in recent years, when "sharp and blunt" has become rhyming cant for... well, you can probably think of a non-printable word that rhymes with "blunt." But that usage is too recent for "Watkin's Ale."