Looking down this old thread I was struck by this comment:

I imagine that the cost of trying to catalogue all the tapes, and in particular assessing their condition and the possible costs of restoring them would be considerable. There is also the considerable problem of trying to establish who is entitled to what royalties from the individual tapes. Quite possibly the cost of doing all of this would be far more then their commercial value.

Setting aside the issues of survival of the actual tapes I would make a big guess that the executors (who are probably not folkies) decided that the cost of establishing entitlement to royalties from the various recordings simply exceeded the cash value to the estate.

From an artistic point of view I find the idea distressing but I can see that it would make sense to a bean counter.