I think all folk instrumental music suffers when it gets divorced from its roots as music for dancing or parading to, and it sheds a lot of its appeal to most people. In fact I think that also applies to other types of instrumental music.

But I get a bit uneasy at the suggestion that this in itself is a major reason why there are relatively few black faces in most "folk" settings; that can come perilously close to colluding with the kind of stereotypes about "a natural sense of rhythym", and "a simple childlike people" and so forth - the same kind of stereotypes that have often been applied to other devalued groups, such as the Irish. It's the flip side of the stereotype that sees the same groups as potentially dangerous and brutal.

In England at any rate I would guess that the relatively absence of black faces in folk clubs or festivals arises largely from the same factors that mean that most places in England outside largish towns and cities tend not to see that many black people or Asians - and noone would suggest that that is because black people or Asians are natural city-dwellers in a way white people are not.