Everyone does the best they can in the times they live in, there were some pretty loopy ideas regarding race and genetics doing the rounds when both Sharp and Lomax were working. To judge them as fascists by today's standards is harsh.
We can criticise Maccoll (for instance), for forcing folk music down a very narrow path although he undoubtedly was acting from the best of intentions. The early collectors were anxious to preserve a cannon of songs that they considered in danger, they showed less interest in the history of the singers or the details of their performance.
We do not have to repeat the same mistakes, consider for a moment Fred Jordan singing Paul McCartney's "Yesterday", would it be a folk song? Obviously not but the performance would be worth hearing and would have it roots firmly in the tradition. It would have been interesting for the collectors to have, at least, listed the other songs in their informants repertoire.
All European Folk Music forms are subject to cross over, and this fact is better understood today.
Like all threads concerning What is Folk, we are unlikely to come to any conclusions but, these days, I find that the performance is the thing, and what ever folk music is it lies there