This thread has prompted me to listen to Nick Drake again, but I'm afraid I still don't get it.

I think it's significant that the style of "contemporary folk" which Nick Drake typifies more or less disappeared after a few years. It was the singer-songwriters such as those Will mentions, who were producing a rather different type of song, who have proved long-lasting.

I'm still of the opinion that the reason he was largely unrecognised at the time was that he was just one of many in the genre, and apparently one with poor performing skills despite his abilities as a guitarist. As I recall, most folk clubs had at least a couple of singer-songwriters performing this kind of song and in a similar style. Of course, most of them were turning out unmitigated crap, but by no means all of them. However most of them were never recorded, never performed outside their local area, and never had the opportunity to be retrospectively discovered.