Jen - Your knowledge of the monetary angle of these things is far superior to mine so I won't disagree with you, except in that all the sessions you have mentioned have a limited time span. It's been my experience at other festivals that if the session is allowed to continue for far more than 2 hours then it's not the players that are the ones that will be spending the money, but the people that come in and listen to them. And the more the players, singers et all that are encouraged to keep playing, singing etc. the more people will pass through, each buying their share.
I must agree though, that it takes a brave host to try this out, especially when other establishments offer free amplified music. I can only go by one particular place at another week long festival that I won't mention that openly encourages musicians all day long (and into the early hours of the morning too) by supplying said musicians, singers et all with jugs of beer and plates of food 3 or 4 times a day, and happily says 'if I keep the musicdians, I keep the crowds'. He's been doing it for the last 20 years to my knowledge, and I respect his judgement too.
I will say though, it will take a brave host to take that plunge at Broadstairs.
John barden