I think the word traditional is being used to distinguish older songs from those written more recently. It seems useful to be able to specify what you are talking about. As for pejorative overtones, my observation is that some people like the whole range of music, others have preferences. The polite people can enjoy their favorites without putting down what others prefer (in this case, I guess, traditional/contemporary??) The others KNOW that what they like is of higher quality than what others like. So, what else is new?
    That said, the NYC people are calling their November event "A Festival of Traditional Music." Have you seen the descriptions at www.eisteddfod-ny.org? I'm not sure how Eisteddfod informs this conversation. I guess it has more performers who do music they have learned (directly or indirectly) from older people, but also quite a few who write songs.