I guess I'm lucky to be an old fashioned Brit, who still has access to festivals where the organisers care about the music, and don't spend time agonising about the genre labels to be applied. Anyone who wants to find a model for the perfect folk festival should come to the Sidmouth International Festival, where traditional musicians and singers rub shoulders with singer/songwriters, and all anyone cares about is the entertainment value of the performances. It's all about mutual respect.
After all, by the most basic definition of folk music (handed down the generations, rather than published), two of the earliest songs in the calendar, "Summer is icumen in", and "The cutty wren", would be classified as singer/songwriter material, having been published in the 13th and 14th centuries. My own take on this is that both kinds are necessary, and it's up to us to make our preferences known to organisers who can't get the balance right, either by voting with our purses (a language they all understand), or by starting our own festivals, in direct competition.