Bernard, I agree that it's better to use a memory aid than to go blank on a lyric in the middle of a song and then either hem and haw — or, sometimes, even improvise.

Yes, I know, the latter is a lot of where "the folk process" comes from, and it may even be a good thing with trad. songs that have many versions. But if you're singing a song in which the lyricist composed not only specific lyrics but damned good ones, your spur-of-the moment improvisation probably won't be as good, and it's likely to make it HARDER for you to sing the correct lyrics next time.

Nancy, and others, I agree there's a difference between a performing "singaround" and a sing-along-type song circle.    You can't get much singing along unless people know the lyrics. Without lyric sheets of some sort, you're limited to very simple, repetitive songs or very, very familiar ones.
Personally, sometimes I'd even like to provide sheet music, to encourage others to harmonize; if my song is new to most other participants and I go into harmony, the others do too, so no one is carrying melody, and if the song's harmony isn't a simple 3rd above or below, it's rare for anyone else to spontaneously come up with one.    IMO, there are songs that are pretty much MADE by harmonies, and I don't like them to be excluded from sing-alongs because of some rule against using printed materials.

Chris, as for people telling you you "should" learn a song by heart, let me say this:   From early childhood I was blessed with a superior talent for memorizing things like song lyrics, poems, play scripts, etc.   (Too bad it wasn't a very marketable skill!)   It's not as easy for me as it was up to about age 50, but it's still easier for me than for others.   But many others of equal or greater "intelligence" don't have that particular talent, and I think it's pretty presumptive of those of us who CAN memorize lyrics easily to expect everyone else to be able to do it. If you don't yet know the lyrics to your favorite songs by heart, it's not necessarily because you're stupid or lazy.   A rule that nobody can use a book or lyric sheet is kind of like telling people they can't come on the hike if they need a cane or their asthma inhaler.