The club I go to has a policy of booking roughly three touring guest nights to one local established talent night to one singers night. Guests recently have included Martin Carthy, John Kirkpatrick and Martin Wyndham Read (now that was a good run!). The greater the guest, the larger the attendance. The first spot is picked by the organiser from among the club's reliable "residents" i.e. attendees who do sing or play to a reasonable (but not professional) standards. Singer's night is partly pre-arranged club members and partly whoever turns up. Attendance is generally lowest on Singer's nights, but they are seen as important to individual club members who want to sing/play. And no, they won't generally perform to professional standards, but I don't think that's the point.

It's that difficult concept of a "club", existing primarily for its members, alongside being a place that presents quality entertainment to a paying audience. Maybe I'm not seeing it clearly, but being a place for outside (i.e. non-regular club attendee) wannabe musos to come and inflict themselves on the population seems to be placed third in our organiser's priorities.

Fortunately, there are a number of local clubs, so there is room for a diversity of talents and approaches to suit different individuals needs.

So my answer is no, folk clubs aren't shite. If they didn't exist, where else would I go to hear folk music? If their audiences are aging, that's because the baby boomers who came in with the 60s folk wave are aging. If there is to be a crisis, it will be because the clubs run out of potential organisers willing to put up with the hassle.