Joe, to me it's a question of honesty and integrity, which I believe you probably do care about.

No one can prevent you from singing a song even if they wanted to, whether that's for your own pleasure, for public performance, or (in most circumstances) to record it. At best they can expect to be paid when you do so. However if you admire someone's creative input sufficiently to want to sing their song or imitate their arrangement (and I see nothing wrong in that) then it is, at the very least, simple good manners to acknowledge their contribution. To claim, or even to give the impression, that it is actually your own work is not only dishonest but disrespectful to the original writer or arranger, and ultimately to your audience. The more famous you are, the more this matters (or should).

I don't want to get drawn into the extent to which Dylan's version of Canadee-i-o draws on Nic Jones's. What is indisputable is that Dylan's own officlal website claims this is "Written by Bob Dylan (arr)". Maybe that "(arr)" gets him off the hook from a legal point of view, but to most readers it gives the impression that the lyrics (if no more) are his own work, which is clearly not the case. That is quite simply dishonest and disrespectful, in my view.