You are right that it is really about standards. If you have a good singer who has put in the work to learn and understand the song, it won't matter if they need to refer to a crib sheet because that won't interfere with their performance and delivery. The reality is that the majority of those who rely on having the words in front of them have not put in that work, and can't deliver the song properly. Learning a song from memory requires you to study it and think about it in a way that simply reading from a book does not.

My other point is that while many singers, myself included, may "know" hundreds of songs, for most purposes we only need to have a small number ready to performance standard. A floorsinger at a folk club might only get to perform two or three songs in an evening. Even at a weekend festival they probably won't need more than a dozen. A professional performer probably needs no more than 15 or 20 at any one time to make up their current setlist (although they can probably manage more than that). Is it really too much to ask of someone who expects others to listen to their singing that they put in the effort to learn just a handful of songs? Allowing of course for those with genuine memory problems.