Whatever makes you think that folk (whatever that is) is a small market? It is a huge market, with many small niches. There are dozens, if not hundreds, of separate folk genres, each of which has its own advocates and following. Some people restrict their participation and listening to one or a few, while others have much broader tastes. Should 99 of these go away so that the 100th can have the entire listening audience? Never going to happen, for too many reasons to list here.

Likewise there are hundreds of thousands of folk CDs available and hundreds (at least) of radio stations play folk music. Granted, you may have to resort to internet radio to hear most of them, but they are available...some are available only on line. The BBC alone must have two dozen or more. Most of this music is not "homogenized, pasteurized, and bastardized" by any means...consider, if nothing else, all of the Mudcatters who have produced CDs! My most recent CD Baby order was for three Mudcatter CDs.