In Kent we not only have the Broadstairs, Rochester and Tenterden festivals, but a number of singing morris sides, who dance a bit, and then take the music/ singing into the pub. Although not compulsory, they encourage all members to do a turn, or just join in with the songs someone else is leading. It would be hard not to have heard some folk music in Kent.
As for folk clubs, I think the most interesting is the Dartford one. They moved into a room in the working mens club, where the beer is modestly priced and the manager was wise enough to think ' real ale'. The format is to have a guest every week. The attendance is about 100 people a week, half of whom turn up regularly. Members of the club sit on the working mens committee, and the non folkie locals like the choice of beers.
I think that to answer the original ' where have all the folkies gone' might be 'in Kent'.