When I washed up up on these shores I was roundly - and immediately - abused for describing any non-traditional music as folk music. That flies in the face of web sites, record labels, radio programmes, shop filing systems, folk clubs (AFAIK) and festivals agreeing with my suppositions. If there was a war, it was over before I arrived.
Except on mudcat where, like those Japanese soldiers on pacific islands, the war rages on.

I would suggest that the tradition and folk are both alive and well.