Whatever one's taste in music surely the ultimate, base level test is whether people sing along. Go into a typical pub (not one where the folk club is being held at that time) get your guitar out and start singing something like Bye Bye Love by the Everly Brothers, and people will join in - at least on the chorus (and get the words wrong so they make bits up to fit {the folk process?}). Sing the Outlandish Knight, and most people will consider it a very good time to go to the bar or start talking.

I have tried this experiment in a band I was in for a while. They wanted to add a few more `real' folk songs, so I volunteered to sing The Blackbird and She Moved Through The Fair (a good example of a song widely accepted as trad but where the writer is known - Padraic Collum - and it is said to be a concatenation of some older trad songs and poems). The audiences would love the Everly Brothers stuff, and the Black Velvet Band (again a `trad Irish' song that actually isn't, I believe and something of a hit record for The Dubliners back in the day). Now, this could be something to do with my singing, but when it was time for one of the folk ballads, the bar was packed.

So I'd say of course a few modern pop songs will become `folk', they are already. Beatles songs already are. I'm the first to acknowledge that I prefer `traditional folk songs' but surprisingly few folk sing them, or know them. And I would have thought that had to be at least part of any test of `folk music'.