Depends on the club and it's MO. My favourite local club (monthly)has good quality floor singers and a very healthy attendance, with never any problems with audience participation/attention. It would take some beating on any evaluation scale.

Another local club (weekly) operates as mainly performers/singers only. It's well attended, but won't attract audience simply because the level of quality varies dramatically - but the club works fine as it is.

Another operates as a weekly club with guests and a single support floor spot. Again, very well attended (loads o'money)- but not my idea of a folk club because it operates more as a concert/night-club type venue.
Despite its apparent success, the rattle from the back (by the bar) and the front stage-left (by the organisers & entourage) helps to counter any jealousies other club organisers might otherwise feel.