"how do we explain to future generations why no folksongs were created in the 20th century?"

Perhaps by pointing out that, on account of the penetration of the mass media into all aspects of the everyday lives of the general populace, no such thing as folksong (in the sense it used to be understood) exists at all, at least in that part of the world sometimes referred to as 'The West'. The sad fact is that scarcely anyone sings any more (we had the football chant debate on another thread, thanks). Not songs by Richard Thompson or Peter Bellamy, not Dylan or Donovan, not even the works John Lennon.

If we choose to define 'folksong' as 'that which is sung in folk clubs' then of course the rules change.