Golden Oldie pop songs are OK - but I don't think they count as folk - and they are sometimes not appropriate at a folk session.
One of the problems is that the non-folkie co-habitants of the pub tend to really like the poppy stuff, and will sing along etc etc. This changes the mood of the evening, and sometimes runs the risk of "dumming down" (sorry - emotive phrase) of the evening as the poppy stuff starts to dominate. Perhaps its because there aren't enough singalong poppy sessions around - so you sometimes end up with an awkward hybrid evening, where the mood lurches from upbeat to downbeat without any real flow.
I used to think that anything anyone wanted to sing was OK in a folkie context - but now I'm not so sure.
Personally I don't mind the old popsongs if they can be blended in somehow & given a "folkie" feel (sorry - ambiguous phrase). What I don't like is the old poppie stuff delivered without any change from its original format - ie just an attempt to reproduce the records.
So - I'm no closer to what IS a folk song - but that's my contribution to what is NOT a folk song.

Kris