Many of the big commercial festivals are sold out in advance. It's not price which is keeping people out, it's capacity.

The reason the wider population isn't playing folk music isn't because people aren't exposed to it - most people have some idea of folk music and what it sounds like. They ignore it because they don't like it - they don't want to make their own entertainment when they can get highly-polished professional entertainment on tap, and they regard those of us who do as a bit odd.

When people like this do get into folk music (as some do) it is more likely to be via the big commercial festivals (such as Cambridge here in the UK), which tend to book guests who I would not necessarily consider "folk" myself. You are not going to get these people's attention by expecting them to stand out in the rain trying to listen to unknown musicians who they can't hear, with nothing to eat or drink, nowhere to buy books or CDs or anything else, and no toilets. Not even if it's free.