Ruth
"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."
Who "in the rest of the world" and to what has it been changed?
Even if I were to allow a body as predatory and self-serving as 'the music industry' to change my concept of a music I am familiar with, whose interests would it serve to accept their definition (which is what)?
The general populace has no conception of the term 'folk'; our failing is not to have managed to involved them in what we believe important - so where does "the rest of the world" come into it.   
Is re-defining the term going to put one more bum on one more seat?
By accepting the singer-songwriters (or anybody who choses to describe themselves as 'folk') into the definition how then are we going to relate our music to the terms 'folklore' or 'folktales' or the hundreds of books which have been and are still being published under the banner 'folk'?
On a more personal note, is any change going to make it easier for me to find the music I (or anybody) would like to go to a folk club and listen to occasionally? On the contrary - it would be accepting the mis-use of the term by making it meaningless.
The only winners in all of this would be the usurpers of the term who have been largely responsible for the present mess the folk scene is at present and who, so far at least, haven't even bothered to produce a viable alternative (at present it seems to range from "whatever I choose to call 'folk' to 'anything that is presented at a folk club'.
Jim Carroll