"Didn't bluegrass really orginate from the hill folk?"

Well...country music and Appalachian music did. Bluegrass as a category was sorta 'invented' by some bands who needed a name for their new style....like Bill Monroe.

The old style that Hazel Dickens is a product of is still very alive and doing its thing, while **Bluegrass** has become a production and almost a stereotype of itself.
Places like the West Virginia Music festival and the annual Augusta Heritage series at Davis & Elkins College still feature the 'old' music a lot.