Horses for courses, as they say.

I would say that (traditional) folk songs are not, fundamentally, about "audience appeal". I don't like to see singarounds separated into "performers" and "the audience", for example. On the other hand there are certainly many situations where the split between performers and audiences is exactly as you would find in every other branch of music (classical, jazz, cabaret ...) that are perfectly acceptable.

And I am not sure who this "we" is who should be demanding this higher standard either. If people enjoy going to a pub/club as it is, I for one don't feel I should try to change it by external diktat. On the other hand if it isn't good enough to keep people coming (whatever its structure) the session will change or fold.