Ron,
Can't speak for the US - I saw the downturn here in the UK, which was preceeded by a remarkable public debate started off by an article in Folk Review entitled 'Crap Begets Crap' - still have some of it on file.
The clubs I had experience of that lasted longers with the largest audiences were those which didn't flap their arms about and run round like headless chickens were those which decided what music they were going to specialise in, and went for it.
Those who dropped out of the scene did so because they were neither fish nor fowl.
The persistant compaint at the time was that people wouldn't go to folk clubs because they didn't know what they were going to hear.
The scene never picked up from there.
"I am certain that the songs and music will survive into the next generation and well beyone."
I wonder which songs and music - I can tell you what Irish songs and music will survive and flourish - don't have clue about the UK any more - the scene seems to be full of mayflies whose attention span doesn't stretch over more than three verses.
Good luck -
Jim Carroll