Les, I think there's a subtle difference between playing music specifically for dancing and playing music as a direct performance to a listening audience.

For the dance, exactness and clarity are important - all playing together, keeping a steady tempo, playing the right notes at the right time. And the "audience" aren't watching the musicians - they're interacting with each other, and the music is the glue that holds that interaction together. For a band to use dots is not a problem, and has been done - as you rightly say, for hundreds of years.

But projecting and performing, face to face, with an audience that is silently concentrating on you requires, IMO, a rather different set of skills - and the barrier of the permanent music stand and the permanent folder of unlearned songs is a barrier indeed for me.