Of course one can always take any scenario to ridiculous extremes. But what's the alternative? No standards at all where anyone can walk into a folk club and demand to be heard even though they can't hold a note, haven't prepared or practiced and sound bloody awful. And that they can come back week after week peddling the same god-awful rubbish with no improvement?   This, from what I have heard and to some extent from my own experience is the current situation in some clubs.
Do you really expect people to put up with such 'performances' for any length of time and say "Oh but its Folk Music, how quaint, how wonderful"? I know I wouldn't.