Just to add my tuppenceworth (or slightly more than), the editor of our local folk magazine, Tykes News, asked a little while ago about the apparent decline of the folk club and I replied as follows:

This is an issue that concerns me as I am sure it does anyone who remembers the great days in the 70' & early 80's (and presumably before but I wasn't around then!) when clubs were full and the atmosphere was buzzing (at least it was in my native north east). We still have some great nights but all too often the enjoyment of a great performer or group is diluted by the fact that one has to sit through some dreadful (and I make no apologies for using the word) floor singers.
Don't get me wrong here, I believe the folk club is an essential place for young and/or inexperienced singers and musicians to get some exposure and build up confidence. I enjoy singarounds at festivals though I must confess I rarely attend these at clubs. I've heard some stars of the future make their first hesitant steps in clubs but I've also sat through renditions of tiresome songs by people who simply cannot sing and should have realised, or been told, by now. What I find inexcusable is that, having paid a reasonable sum to see a favourite artist, I have to listen to people who plainly have no talent at all for performance eating into the main artist's time on stage. I would dearly love to perform my own music in front of people but I am well aware that I have no aptitude for performing live, due to an appalling lack of sense of rhythm (just ask anyone who has danced with me!) and would not presume to foist myself upon an audience.
At a recent club night I attended, which heavily featured the aforesaid talentless floorsingers and a deeply drab venue, I suspect that there was there was nobody under the age of 40. Yet youth in abundance is evident at many relatively traditional festivals and at events such as the Demon Barber Sessions in Bradford. We need to get these people, and others, into the clubs. With the large number of other attractions on offer, particularly in the urban parts of our area, this is going to be an uphill task.
I believe, though I suspect there will be several who will disagree (!), that there needs to be a change in format of many clubs to have some form of quality control and limit on number of floor singers on guest nights. Maybe adopting the Topic's and other clubs' approach of having regular featured support acts is the answer. This would give you some confidence that, having dragged yourself away from the comfort of your CD collection, you are likely to have a good night out and not a rollercoaster ride from the sublime to the sometimes, frankly, ridiculous.