When I came back into folk music clubs (last decade) after a good few years away, I was struck by two things.
One, people didn't join in the choruses as they used to. My wife and I felt a little exposed, because we did. Strange, I now think that the club I go to does join in the choruses a lot. Maybe it's to drown my attempts?
Two, there was much more PA. There seemed to be very little true acoustic around. I still think that's true, but then the club I go to is in a pub and pure acoustic wouldn't work. I hate having the incessant buzz of conversation - I'm there to listen to the music. There are a few people who walk in and out of the area, go for drinks etc in the middle of songs. I think all this is partly because of the PA - if they had to be quiet to hear the music than they would. Or there'd be more pressure from the folks who do care.
I don't have any particular position on using electric instruments in a way that supports folk music, that enriches it by presenting a new arrangement of familiar songs. This is basically what has happened in the past with the introduction of the guitar, etc. When the electric instrument is used just to drown the music in noise, or to produce something that has no respect for the "feel" of folk, that's another matter. I accept that it can be a matter of taste, round the edges.
Which gets us back to definitions of what is folk. As a non-singer non-musician, I don't accept that folk music can be defined by participation - I join in the choruses but my son joins in with the band at his heavy metal concerts, and I don't see them as possibilities for acoustic-isation!