Reggie, I certainly think crowd control is a legitimate function of the SC and Folklife security, but it doesn't sound like that was an issue in your case. (It wouldn't be the first time someone in a position of authority or power remembered the letter of the law but forgot the spirit and purpose of it.)

I also understand why the Folklife Committee frowns on unregistered street musicians and vendors selling things. It costs a lot of money to rent the Seattle Center stages and rooms and equipment, and the scheduled performers (which should have included you IMO) perform free and agree to give the Festival a cut of their CD saled. That makes it very frustrating for them and the registered crafts vendors to have huge competition from the "volunteers."   For better or worse, there are unusually large crowds at Seattle Center during Folklife and the Festival itself is a main reason for that, so I do like to see most of the money that's spent there actually helping maintain the Festival.   The Festival could -- and eventually may have to -- restrict access and charge entrance fees.   If/when that happens, there may be no street performers, if only because they don't want to pay the fees. For now, I don't think the Festival can prohibit any activity that's not illegal or poses a threat to public safety. And as a rule I find that the Festival folks are pretty tolerant of street performers doing their acts (even when they do block traffic or drown out the scheduled music) and selling their CDs or other goods.    I think your treatment was the exception -- and I hope so.

But harrassment of buskers exists in all sorts of venues and locations besides Folklife. In Portland, OR, there was -- maybe still is -- an ordinance that if you're doing music in the downtown area and can be HEARD 50 feet away, you can be arrested and your instrument confiscated.   (If you're just yelling or playing your boombox loud, the ordinance doesn't apply, nor do you have to sound LOUD 50 feet away. You just have to be audible.
I believe the arrests are complaint-driven and the cops usually give a busker a warning the first time, but I would never have taken the risk that my vintage Martin guitar might end up in "police custody" even for a few hours. It was a very draconian law, and I think enforcement of it has slacked off in very recent years, but still ... .

Genie