Every time you sing a song you are, in fact, evolving it if only to suit your requirements; in so doing you are no different from any other Traditional Singer at any other point in time.

That's true enough at the point of performance. What's different is what happens next - what happens to that song because of what the singer does to it. These days, not a lot - as I said above, there are never going to be multiple Tambourine Mans (Men?) - except to the extent that the Byrds' version is an established variant - because anyone hearing the song performed can go straight back to the source.

If traditions aren't evolving its because our concept of The Tradition is out of keeping with the reality of the tradition

To me, that's a bit like defining electric trains as a form of steam train, then saying that if people think steam trains aren't running any more it's because their concept is out of keeping with the reality of steam trains. Things change. People used to make music much, much more than they do now - mainly because the option of listening to it without making it was much less widely available - and when they did, things happened to music that don't get a chance to happen now. Other stuff happens instead.