As Art says, the book (RUS) was intended for group singing,   If you interpret that as meaning that every person in attendance would, with the aid of the book, be able to sing every word of every song sung, then it is clear that the authors did in fact intend it as a "folkie hymnal".

And if that sort of experience is what you are looking for, the book would be excellent for that.

Therefore it would be great for kids' camps, and possibly for retirement homes (though the print is small).

However, folkies, by definition are interested in more than just "group singing".   We don't just want to sing a bunch of familiar songs--with the extremely controversial idea of whatever lots of people sing is by definition "folk" (mainly we don't accept that assertion)--or what is in a given book.

We want to go deeper into the music--and in fact make some of it our own--which can only be done by memorizing it.

I also would take issue with the idea that in most of the US, due to distance, you only have two choices--RUS or solo music.   

I go to an annual gathering in the mountains of Pennsylvania (the part which is sometimes called Alabama--as in the saying "Pennsylvania is Pittsburgh on one side and Philadelphia on the other, with Alabama in the middle".)   I was asked years ago to do so, and it's a fun group and a great location.   My primary function is to lead the sea songs--from the middle of the pond, while swimming.   There are remarkably few books in the middle of the pond. And lots of sea songs have plenty for the group to do, while not requiring them to sing every word of every verse. Also the informal sing which takes place after about midnight Saturday night--with no books at all---involves some excellent musicians--vocal and instrumental.)

This gathering uses RUS as its foundation, even though many have been singing the same songs from it for so many years that if they would trust themselves to put the book away, institutional memory would carry them.   When we do get out of the book, the singing is at least as strong as with it.

And people at this gathering do in fact have other musical outlets than RUS sings. Particularly the bluegrass and country traditions are strong.

I suspect that in much of the US there are in fact other options to make music together than RUS.   It depends on how much of a priority it is for a given person. "Where there's a will..."