I wrote this yesterday but didn't post it.
For what it's worth here's my view on "traditional" folk song.
That stuff most commonly labelled "Trad." is folk music was generated in an era when the concept of sharing one's daily experience through the medium of song was extant in society. This concept is long gone from western cultures, to be replaced by an industry that provides entertainment pre-packaged and suitably stratified for its various audiences.
Q) How many great songs of WWII are the product of "the people" rather than the music industry ?
The change in the way entertainment is provided has accompanied the move of population from rural to urban centres and the rise of individual wealth as currency rather than goods. (That is it paced with the industrial revolution). Society has slowly become accustomed to purchasing it's entertainment rather than creating it.
Q) Why did people find less and less reason for parcipitative entertainment when they could simply spectate ?
Some of us however still value live performance in a low-key "under-produced" environment, and that's where the tradition still exists. Granted it's the tradition of a minority rather than the outpouring of the masses, but it's all we've got ! It exists. It changes with every new arrival. Songs and tunes, styles and instrumentation alter over time, but it's still there.