You have cut to the core of the arguments here over what folk music is. I reside in your camp---but the fire is burning out and the tent is half blown away. Is there a future for the tradition? I'm reminded of that last great scene in the film of Ray Bradbury's book Farenheit 451. Books have been outlawed. It's a cold wintry day and those dedicated to preserving their favorite books are walking around as beautiful and gentle snowflakes descend on them. Individually, they are working on memorizing entire books of their choice. They will recite it later to all who want to hear it. And some of the hearers will choose to learn it too.
Is there a future for tradition? Time will tell. If not, something extremely valuable to me will be lost. And when it is lost, there can be no sounds like it in the forest.