The guy has a very limited definition of "traditional". As you already have pointed out adding new words to existing tunes, singing songs to different tunes etc. has done before many times (we have a word for it: folk process).

I guess the club in question won`t get to many performers if they stick to such a limited definition. A real strict traditionalist would perhaps (but only perhaps) allow a hollow logbanged with a stone... ;0)

BTW pan pipes might not be traditional in England but they are definitely traditional somewhere - even in the US (think of Henry Thomas`s "Fishing Blues").

Don`t let that stop you!

Best
Ernest