I suppose it depends on how one defines "folk music" whether it has demised or not. If you view Billy Brag, or Ani DiFranco, or Steeleye Span, or June Tabor, or Leon Rosselsohn as folk (and they play at the Ark, so they must be), then it seems very alive to me: new recordings, active tours, lots of good music that sings about people and the ways that they live.