Mr H - there's defining and then there's singing. Speaking as a paid-up member of the 1954 Faithful, I'm happy to accept The Scarecrow or Shoals of Herring or Old Molly Metcalfe as a folk song, even though each one of them has a single correct version; at least, if they aren't folk songs I'm not sure what they are. On the other hand, Graham Coxon (of Blur) has just released what's being described as "his first folk album"; I haven't heard it, but I'd be quite surprised if there's anything I'd consider folk on there. (Under the horse definition, of course, all his albums have been folk music, along with all of everyone else's albums.)

Going back a few steps, I think there are two reasons why people like me hang on to the 1954 definition. One is just that it is a definition - it doesn't rely on subjective judgments or circular arguments, which all the suggested alternatives seem to do. But the main reason is that

a) there are bajillions of traditional songs out there; hundreds of songs, thousands of variants, a lifetime of music
b) there aren't that many places where you can hear them sung and even fewer places where you can sing them
c) most of the places where you can carry the label 'folk'
d) an evening at a folk club listening to songs by Ralph McTell and Buddy Holly and here's one I dusted off recently is an evening that could have been spent listening to traditional songs
e) there are lots of folk clubs where you can spend an evening listening to songs by Ralph McTell and Johnny Mathis and here's one I finished this afternoon, and not that many where where you can spend the time listening to traditional songs
f) this is a damn shame

I'm not anti-singer/songwriter - I worship Bob as much as the next man, I've got most of Robyn Hitchcock's back catalogue, I even write songs myself. I just think traditional songs in performance are a scarce and valuable resource - and if people are turning up to FCs not even expecting to hear any traditional material, then we're not looking after that resource very well.