I'm not sure entertainment is always a key ingredient to folk music-- it certainly is to some, but there are a lot of songs, including many of the old ballads, that hold the singer and audience together in a spell but are not necessarily entertaining in the sense of giving them a good time. Instead they create a sense of community (if only temporarily) as if you and the listener have suddenly understand or at least contmeplate one of life's great mysteries together.
Some of the blues and spiritual songs do this too.
As for virtuosity-- it's fine as long as it doesn't get in the way of this intense magic and the meaning of the words.
The older I get, the more I am impressed by a certain sort of virtuosity one finds in the great field-recordings. it has little to do with technical facility but a lot to do with a single-minded intensity in putting important songs across.
For a modern singer, the secret is to learn from the old-timers and to re-communicate that intensity and tradition while still being true and authentic to who one is. For a long time, I cared only about mastering the wonderful array of traditional vocal techniques, and this is a useful way to begin. But eventually, you have to make use of them in the light of your own experience. If one is an urban singer with homogenized or blended traditions, this may take years of work because one does not want to seem as if one has put on a minstrel's mask through which to sing.
The virtuosity comes from reconciling what you have inherited or acquired with who you are for the sake of the song. When that happens in performance, you have the satisfaction of knowing you have passed something precious along.