Everything else aside, I certainly think it's a damn shame that a well-regarded professional performer would be turned away from any venue for the sole reason that he/she is not a songwriter. And of course, it's doubly (or triply) wrong wrong for an organization billing itself as "folk" to have such a policy!

There are and always have been singers and musicans worth hearing who are primarily (and even exclusively) interpreters of material that they understand, love, and select for their audiences' pleasure and edification. A couple of pertintent examples from the recent past, in the general area of folk and folk-influenced pop/rock music: Dave Van Rock, Janis Joplin, Joe Cocker. I'd certainly enjoy attending one of those folks' shows; I'm not sure how much I'd enjoy listening to someone whose only claim to legitimacy is the fact that they perform their own compositions to the exclusion to proven material that people know and love.