I think most of us would say that memorization of lyrics is a good thing - no question about that. The trouble is, some of us just don't have the confidence to sing without a lyrics sheet - so in many singing sessions, we don't feel "good enough." And as a result, we don't bother. Some of us stop trying.
And some of us limit our singing to church, where people are required to be nice.
But I'm off to my music gathering tomorrow, welcome or not. Chances are pretty good that I'll have a wonderful time, but the "restrictions" put an unpleasant edge on it. Still the people always love my summer camp songs, which I have sung without printed lyrics all my life.

-Joe-