The 1954 definition, from its conception, has always been open to improvement - has there ever been a definition that hasn't?
The problem now is that the debate is divided between those who think there should be a definition and those who think there shouldn't -actually discussing what makes up the constituent parts of folk song has become a no-go area (I can't think of any other musical form that doesn't have a more-or-less generally accepted identification of its own).
In our (Pat Mackenzie's and mine) experience as collectors since the early 1970s, every field singer we asked produced a description of their own which more-or-less conformed with our own understanding of what a folk/traditional song was and was prepared to explain why they believed what they did.
None of these 'definitions' can be described as deeply analytically, intellectual or particularly well thought out but they came from how the songs related to the singers, their families, their neighbours.... - it was what the songs meant to them and what made them unique.
Probably some of the the most deeply thought out and articulate statements came from Norfolk singer, Walter Pardon.
I can't find the cutting at present but some years ago Jean Richie was interviewed by The Irish Times where she described how, when she was collecting in Ireland in the 1950s she was given all the pop songs of the past, indiscriminate of type, until she asked if they knew 'Barbara Allen' - "That's when all the beautiful old traditional songs and ballads began to pour out".
The problem is that while we sing the songs we really know very little of the tradition and what part it played in people's lives and consciousness simply because we never got round to asking them.
I believe Bert Lloyd was right when he wrote in 'Folk Song in England' in 1967.

"If "Little Boxes" and "The Red Flag" are folk songs, we need a new term to describe "The Outlandish Knight", "Searching for Lambs" and "The Coal-Owner and the Pitman's Wife".
In any case, no special mystical virtue attaches to the notion of folk song, grand as some folkloric creations may be. Show-business songs and labour hymns have their own qualities, and neither their mass connections nor their artistic character are satisfactorily suggested and emphasized by emotionally applying the description 'folk song' to them. Indeed, it could be argued that in some respects the term is belittling, seeing that folk song proper, modest article that it is, has neither the colossal acceptability of the commercial product nor the broad idealistic horizon of the political mass song."

One thing is certain - if you are going to be involved in any specific form of music, whether it is by writing about it, discussing or arguing about it, running a club to entice people in to listen to it... or simply telling your mates why you like it, you need some form of definition in order to pinpoint what you are referring to, and the deeper you become involved in it, the more specific that definition needs to be.
There's no rule to say that you have to "need" or accept any definition, but nobody should have the right to slag off or interfere in any way with the right of those of us who feel we do, as happens far too often during these discussions.
Jim Carroll