This problem, if problem it is, seems to have its roots in two things:

1) Our society is now divided 'horizontally' on the basis of age, whereas years ago, it was divided 'vertically' on the basis of family, village, trade, etc. Now, tweenies, teen agers, 20 somethings, 30 somethings, baby boomers (and so on) have more in common with their own age groups than they have with other generations of their own families. Years ago, traditions and ideas were passed down the line, and young people had to earn their place in the hierarchy. Now, young people are expected/encouraged to go their own way, rebel, etc.

2) The term "Folk" as applied to music has become a label for a genre or style of music. Folk music is now a minority interest. That is completely at odds with what the term "ought to" mean: the music of the people.

So, what we have is two (or more) social groups, roughly divided by age, each with its own cultural anthems, pretensions, and hang ups, instead of one social group with a shared pool of material, and an occasional 'natural' addition to the pool from the occasional creative individual.