"One thing I'd like to know - how do we explain to future generations why no folksongs were created in the 20th century?"

This MUST be a joke, right?

I doubt anybody SERIOUSLY believes that folk music is only formed free from recording technology, input from popular culture etc; because, like the Flat Earth movement, this flies in the face of reason, evidence and common sense. Those who claim otherwise can reasonably be supposed to do so for their own nefarious and exclusivist purposes, and thankfully only constitute a small minority even in folk clubs. A pity their influence on the direction (or rather lack thereof) of the folk "scene" as a whole (in the UK, at least) is rather disproportionate...it doesn't do much for awareness of/enthusiasm for our indigenous musical forms (including traditional folk song).