alanabit - Because of dialects not all people in Northern German are able to fully understand songs by e.g. Fredl Fesl from Bavaria and -vice versa- Hannes Wader occasionally singing low german songs is absolutely not understood in Southern Germany. And neither southern nor northern people are able to totally understand cologne dialect.

I believe that's a limitation of becoming popular all over Germany.
Nevertheless, standard resp. high german is perferred language of most folk singers.

Manfred