The late Tim Hart (Steeleye Span) was once asked about using electric instruments to accompany traditional folk song.

His response was that at the time they were first written/performed, they would have been sung unaccompanied if no instruments were available, or accompanied with whatever was available at the time.

The use of guitars, (acoustic or electric) and other instruments, squeezeboxes, fiddles, banjo, whatever is merely continuing this process.

I think Tim Hart showed in that statement a great understanding of the tradition and faultless logic. Long may our tradition be kept going in this fashion!