"There is no doubt in my mind that there is a mindset in the folk world that means that anything commercially sucessful is unacceptable."
I don't know about unacceptable, but the folk world (which surely, more that any other musical world, is about real people making real music) is a bit allergic to commercial hype.
Commercial sucess is such an all or nothing thing these days.
Certainly to win a competition doesn't prove you're a "bloody good singer". What commecrial success does mean is that your singing and playing is good enough (equal to hundreds of others, perhaps) plus you are some or all of:
+ marketable (young, attractive);
+ a good showman;
+ lucky, e.g. in the right place at the right time;
+ a good promoter (or have contacts who are).

Hard working too: I don't think that sort of success comes easily to anyone. But my point is that the talent, though significant, isn't in proportion to the publicity.

Anahata