Could it be that today the folk scene has many more participants rather than passive audiences? Hence the demand for more varied venues and decline of the conventional stage, performer, audience of yore. Times change as does the traditional performer and audience.
Anyone can afford a guitar today,this makes participation far easier.
(My attention span and interest in unaccompanied singing is severely limited. imperfections in voice, delivery, inflection, etc, etc have no place to hide when there are no additional instruments) Strictly a personal view,but I suspect shared by others.
People also go to be entertained,not to be dictated to as to what may or may not be perceived as a folk song. That information can be obtained from a library and that also will present a complete spectrum of views.
Constantly defining the minutae of the pigeonholing simply drives people away.
If youwant education go to a library, if you want entertainment go to a club. Simples!