The main problem some purists may have with the piano is that even for "three chords accompaniment", it requires a higher level of musical proficiency than, say, guitar or accordeon-type instruments. Folk music is often associated with a high level of technical and interpretational competence, but rarely with an "academic" training.

But most of us (even the "Folk Police") know that a high percentage of the oral tradition has gone through the hands of more or less learned musicians, such as teachers and church organists. There is no need to hide this fact, even if a "folky" interpretation is intended.

Sophisticated arrangements, as mentioned by Mooh above, are quite a different discipline. Somewhere inbetreen are arrangements for amateur choir and piano. All of this is legitimate (- and done by myself -), but must not be confused.