Your first mistake there Greg, is in presuming there were "enormous numbers of musicians". The cost of instruments were quite dear, and were much more rare in the past than they are today. As was the alcohol.
The communities that have these native traditions of music had little money, few instruments, and imbibed mostly homebrew and poteen. If one wasn't in a city, there is also the problem of distances to be covered to get to a public house. In Ireland, there was no public house sort of tradition as there was in England. Music was played and learned at home, where the drinking and singing and dancing also took place.
Honest Greg--life hasn't always been the way it is now. You may even have heard our ancestors didn't amplify their pub sessions too! (Just a gentle slag there)