I always understood plagiarism to mean the taking of someone else's work and passing it off as your own. That is the definition that we always worked on when I was working in a University.

Applying this to Bob Dylan, you have to ask did he take the work of others and pass it off as his own?

I don't think there is a clear cut answer to this as he usually adapted and modified the material he based his songs on but I do think he sailed pretty close to the wind on occasions.

To respond to Little Hawk's question
What I was mainly talking about in my previous post, though, was why people object so much to Bob Dylan doing what thousands of others have done every since folk music began...borrowing from and building upon the past tradition.

The reason why people object is given in the definition of plagiarism above was not because he was successful at it as you claim but because he did not always acknowledge his borrowings.