"The equivalent of 1960/70s beards, aran sweaters, and fisherman's caps,"
That's a stereotype of the music industry's presentation of traditional folk song and it died sometime in the mid-1960s when the boom ended
The traditional clubs were not like that
The Liverpool clubs were full of dock and various types of workers, as were the Mancester clubs
Folk had its posers, as did punk and Jazz and Classical music - that has nothing to do with the various musics themselves
I've never particularly liked punk (or most forms of pop music) but I would not detract from those who do
I don't understand how narrative song of the English folk type can fit in with music based, rhythm dominated punk - probably too old in the tooth to learn now

"do you think it was beginning to happen before the'Riverdance' phenomena in the mid 90's?"
I do Jim
I think it began to happen when the Clancy School began to have an effect (that's now in its 46th year) and a foundation began to be built in 1987 when the foundations were laid with the setting up of the Irish Traditional Music Archive in Merrion Square
Whatever the youngsters coming fresh into the music decide to do with it, they will always have a foundation to return to.
The fact that the children and grandchildren of those who attended the first classes at the early Clancy Weeks are now themselves teaching speaks for itself
Jim