Jonathan,
'(this is crucial) palmed off on the innocent as the real thing'.

Have you evidence that this is the case?

In my 40 odd years as a collector in the field I have come across many source singers who write their own material in all sorts of styles. Very little of this gets enough exposure to join the oral tradition, but I wouldn't care to make any qualititive judgments on any of this. Clearly given the right circumstances some of it would sit happily amongst any collection of traditional songs.