"This means that those who are trying to make a living are competing with the free or near-free events that people set up - club singarounds, sessions, folk weekends, etc. They're also competing with lots of very competent singers and musicians who have little or no inclination to market themselves commercially and who will happily perform just for the love of the music. Also, many of those who regularly do paid gigs and who market CDs of their music are also quite happy to join in local sessions and perform for free."

Good point.
I think it must be very tough for anyone wanting to succeed in the professional arena. And much as I love singing on an amateur level, it's certainly not something I'd want to attempt. There are a lot of competent amateurs out there, and as has been said elsewhere the 'divide' between amateur and pro. is far less defined than it may be in other areas. So what the magic 'something' is which gives an artist that all important leg-up, is a jolly good question.