Do you feel a blues song and an old English Ballad and an Italian folk song are the same?

No, I think they're all traditional. They've all gone through the kind of process DMcG eloquently described several comments back, of communal adoption, preservation & transmission in more or less altered forms. As such, I think - if they're done reasonably well - I'm likely to like the way they sound. (This is not true of singer-songwriter material, even (or especially) if it's done well.)

I might end up doing an Easby and abandoning the word 'folk' altogether, but for now I still think it's worth trying to nudge the meaning of the word a couple of notches back towards 'traditional'. While folk means "traditional songs, mostly" and also means "anything which anyone's prepared to listen to in what they consider to be a folk context", a lot of people are liable to miss out on hearing the good stuff, and never know they have missed out.