I don't think the National Song Book was ever intended, even less regarded, as a source for the folk world. It was for 'community singing', an entirely different thing.

When there were a limited number of books and recordings to provide singers with material it was inevitable that certain songs would be 'done to death' and regardless of their inherent quality people just got fed up with hearing them. In an attempt to create a more individual repertoire singers went in search of less well-known songs, or less well-known versions.

If it's any consolation, the younger generations of singers are now re-discovering these old favourites and thinking of them as hidden gems, and are often surprised when performing them to find that they are actually known to the older section of the audience. They are coming back into circulation.