I was going to oppose the view of "commercial" (ie. "successful") being a bad thing, but I don't think I can say it better than Karine Polwart did.

And I'm not sure what counts as "challenging" whilst staying traditional. If anyone cares to nominate a "challenging" traditional folk group, please let me know. Steeleye Span were as challenging as you like - today their stuff is no more than you could hear in any folk-rock pub gig, and they became challenging by dropping the trad instruments. Bellowhead - great music, but they're doing that by playing in a completely untraditional way. Artisan (sadly no longer performing) - harmony singing is definitely unusual, but almost everything they did was written by them, and they'd had the benefit of lots of formal voice training (especially Hilary). Albion Band, Fairport, Lindisfarne, and (to be fair) Show of Hands - took folk-rock to another level, but derided here as "not our kind of music". Altan, Planxty, the Chieftains - great musicians all, but they're doing nothing that hasn't been done before, and by definition you can't be "challenging" if all you're doing is playing the same pieces in the same style as people who've gone before.

As far as I can see, "challenging" means doing something original. Carthy and Pentangle were original in their arrangements. Steeleye Span and Dylan were original in adopting electric instruments. The problem here is that as soon as you do something original, a zillion hardcore folkies shout "IT'S NOT TRADITIONAL" and sulk. Whilst simultaneously saying that they never hear anything challenging...

Graham.