If the circles that Dylan traveled in, were strict in their adoption of styles, this is because he was in New England and New York where academics were the arbiters of what was folk music. Folk singer from traditions don't care about such stuff. They sing what they know and like. If Doc Watson decides to do "Over The Rainbow", a song written by Harold Arlen and Yip Harburg, he doesn't limit himself.

Dylan is reacting to the idea that he has been criticized by academic folk types for deviating from the stereotypical idea of what a folk singer is.

Folk music is not rigid, but interchanging all the time, adopting new amalgams of musical forms and only people who are concerned with dead museum pieces look at folk music in strict and stringent terms.

Dylan is commenting on the New England and New York academic interest in folk music and if he were to spend time with the real Woody Guthries, etc. he would have found less rigidity and more openness. It's true that there were entrepreneurial types such as Bascom Lamar Lunsford and Jean Thomas who had a business investment in keeping folk stereotypical to draw crowds to their festivals or Alan Lomax who did a lot to uncover folk music but had an investment in copyrights for his books and became the bold knight for the preservation of what he thought folk music was, but all this is irrelevant to a thriving, interesting and active folk music that is developing today all over the world.

Dylan's view is small-minded in that he only takes into consideration the folkies of the Great Folk Scare (to quote Van Ronk) and not the big picture. This is not to say that concentration on a specific style of music shouldn't be done. But in my observation, those folkies who insist on adopting a style of playing to emulate musicians coming from specific cultural backgrounds, for the most part, wind up sounding like weak carbon copies of the original sources of their study.

Folk music remains regardless of academic bantering and quibbling about it and the proof is that a Leadbelly or Woody Guthrie or Pete Seeger is still very much with us today. (That's just the tip of an American iceberg).

The important aspect of folk music, that the academics seem to bypass is its accessibility to anyone who wants to participate in it. Here, being oneself is more important than acquiring the mask of authenticity which folkie academics are advocating.

Being, performing and preserving the music doesn't require giving up one's own personality and viewpoint but requires enough love of the music to try to understand it from the best of one's ability.