I think the consensus here is that neither way is 'right', and that both schools have their stars and dunces.
From a listener's point of view, I have to say I'm glad Villan has outlined the policy at the club he runs, because that means that I can comfortably avoid it should I be in the area. There is a similar club near where I live which prides itself on being 'a performance venue' rather than a folk club, and every act there carries a guitar and generally does self-penned material. The overall effect is one of stupefying dullness and twangling onanism, I'm afraid.
Give me variety any day - which, to me, is contemporary and traditional, accompanied and unaccompanied, group and solo - anything but bloody wall-to-wall snigger snogwriters with guitars!