Here is the fallacy - you say the definition is a "reasonably good guide to music I enjoy".    The 1954 definition only describes how a traditional song was created but says absolutely NOTHING about what kind of song it is.

I know. Where's the fallacy? In my experience, the traditional definition (which does indeed include a lot of blues songs) has proved to be a reasonably good guide to music I enjoy. (Not, just to be clear, the only music I enjoy.)

Why should they be obliged to promote traditional music any more than we at the LSFC are obliged to promote singer-songwriters?

Mainly because we've got this word 'folk', and most newcomers aren't likely to know that it can mean two almost completely different things.