I guess I'd have to say that a PA system is an absolute 'must' in a noisy bar. Certainly, it may compromise the acoustic quality of the music; but the bar noise does a lot more damage. The people who come for the music deserve to be able to hear the music, even if it does have to be amplified to drown out the bar noise.
For quieter venues, a shell or even a simple sound board can help a lot - without distorting the sound. Les, I'm afraid your megaphones might sound like singing through toilet paper tubes.
A few years back, after I became gloriously single, I decided to go out and hear the wonderful Irish music at all the places in town that offered it for St. Pat's Day. Bad idea. I heard lots of bar noise and lots of what might be called "Celtic rock," but none of the beautiful Irish folk music I was looking for. I got lucky this year, though. My sweetie took me to hear Kevin Burke, Johnny Cunningham, and Christian Lemaitre do their Celtic Fiddle Festival. It was a wonderful show. They have several appearances scheduled this month, but I don't know where. One caution - they DO use microphones....
-Joe Offer-