If we accept that we are never going to agree on a hard and fast definition with rigorous boundaries, we then seem to be moving towards those dictionary definitions of 'traditional', which appear to be all we need????

Jim,
Regarding the widespread use of the word folk:
(I tried desperately to capture and drag what you wrote but failed)
Ask the man in the street what he would include under the heading of 'folk song'. There might well be a lot of traditional song in there but it would also include Dylan, Peter, Paul and Mary, Seth Lakeman and all of the stuff on Folk on 2. Don't blame the media, they're only reflecting the common voice.
As for 'failure to engage with the rest of the English-speaking world', most people in our world don't see this as a necessity or even as desirable. We can certainly have our own definition of 'folk song' as long as we don't expect to co-ordinate accurately with the big world out there.