A club should have the right to describe itself and book performers in any way it chooses so long as it recognises the subjectivity of that process. If it assumes a mantle of authenticity by that choice it's claiming one modern sensibility rehashing old material is more folkish than another and that's plain bunkum. A performer could write a ballad in a traditional mode, invent a provenance and the vast majority of the audience wouldn't know it wasn't original.

We're left with facets of the music that are beyond the aural reception of it - contexts which are not appreciated in a club environment. Folk in that sense is best appreciated within academia, not performing environments.