I do theoretically agree with you, Richard. And for that 'classic' definition I'd now substitute the word 'traditional' for the word 'folk'. Look around you. There's plenty of music that's labelled folk that nowhere near meets that 1954 definition. There has been for forty-odd years. The world has changed... and Canute demonstrated many years ago that trying to stop the tide is a fruitless excercise.
What exists really exists. I doubt it can be defined out of existence, even if it was desirable to do so.