I don't think it's just about singer/songwriters and others trying to find a label - I think the nature of what the rest of the world considers to be folk music has been changed irrevocably by the music industry itself, which has commodified the term and changed it beyond all recognition.

Unfortunately, Sony and HMV have a lot more clout than I do, and if they categorise certain artists or genres as "folk" (even with qualifying prefixes such as "nu" or "twisted" et al) the world believes them. It's a term we've lost, to all intents and purposes, as describing a specific type of music which conforms to certain parameters. And I don't feel it's one we're likely to get back - at least, not in any meaningful form.