It's easy to be critical of the early collectors, but it must be remembered that they were mostly not academics but enthusiasts, who were developing techniques and methodology as they went along. Above all, they were inevitably affected by the class assumptions of their time, as well as by their own political or romantic prejudices.

The idea of "folk music" arose from empirical observation. They realised there was a body of music which differed from contemporary art and popular music. They found it among the "lower classes" and saw it was in danger of dying out, because as this class became more upwardly mobile it was seen not only as old-fashioned but symbolic of what they were trying to "better themselves" from.

Just because the collectors' attitudes and conclusions may have been simplistic or even simply wrong does mean that what they identified as "folk" did not exist, or that it is not a meaningful concept today, even if the word itself has become debased (for entirely separate reasons)