And what's wrong with nepotism when it comes to something like folk music/dance? There isn't a lack of new blood in morris or any other part of the folk world, but folk music and dance has always been something passed down from parent to child and other family relationships. I don't see how this is a bad thing suddenly.
On the other hand, while I am the offspring of a morris dancer, I got into morris before my father did, and dragged him in, so sometimes it can go both ways.
My own morris team wouldn't exist without people who'd danced before, because the people in my area had little interest in or knowledge of morris dancing. It's much easier to start with three people who know what they're doing and add on the new blood later than it is to start with people who like the idea of morris without knowing what to do yet.
On the Riverdancy side, I do understand what you're saying with the commercialisation, but morris hasn't been in any danger of ending up in "retirement homes" in about twenty years, and I don't think that this group will affect it either way. It's a cool idea, if they like doing it and people like watching it and they can make a living dancing morris of all things, more power to them. It's not going to change what the rest of us do.
If you want to see skinny athletic teenagers updating traditional dancing in a big way, check out the Boston-area rapper teams. There's a whole bunch of them, they all kick ass, and they still stay reasonably traditional.
(aka Squire of Snowbelt Morris, Rochester, NY)