"But saying that people have to sing it and pass it on in person to make it a "folksong" could be just another arbitrary standard of the past."

well, if there IS any point to calling something folk or traditinal, what criteria is there? passive listening applies to most jazz, classical, choral, opera, etc. If you take away the personalizing of the music, how is your definition of any meaning, much less value?

Does this mean that watching the Nutcracker Suite at Christmas time has become folk music? Or Handel's Messiah has entered the folk tradtion? When a definition become too broad, it loses any ability to define with precision. I can make a better case for singing Happy Birthday, which is still under copyright - justly or otherwise.