Back in the day (my day), many, if not most, folksingers played classical guitars. Burl Ives and his accompanist, Millard Thomas, played classical, So did Theo Bikel, Fred Hellerman (of The Weavers), John Stauber, Harry Belafonte (before Millard Thomas started playing for him), Richard Dyer-Bennet, Will Holt, Will Geer, Oscar Brand, Ed McCurdy, Cynthia Gooding, Martha Schlamme, Win Strake and Sam Hinton. Back then, the only ones who played steel strings were the blues singers and the Country and Western singers. Even the 12 string players were blues based (Leadbelly, Gary Davis).
I didn't own a flat top steel until 1960. We were, mostly, into Spanish and Mexican because we couldn't afford the really good German made instruments. American classicals were not as highly regarded. Martin and Gibson seemed to dominate the sttel string market but, except for the occasional well made Gibson C-1 (I still have mine), Americal didn't really get competative until Guild came out with their Mark series. This is not to say that there were not fine, inexpensive American Nylons. Harmony made the 910 and the 173 models that were cheap, durable and easy to play, easily worth every penny they cost. But, for performance, everyone wanted a C-1 or a Mark III. They say that Burl Ives played a Hauser but he was rich and, beside, I think it was just a legend.

                        Mike