This has recently resurfaced in the Correct the Digital Tradition thread, but I think it's an interesting enough question to deserve it's own.
As I see it, there are two opposing points of view:
1. Folk songs change and evolve, therefore any change in lyrics (even as a result of a mishearing) is part of the folk process and is, as such, valid in terms of being a variation.
2. No, there are enough resources available to learn the 'proper' version, and any change in words suggest that you haven't / can't be bothered to do some basic research on the song. If you're going to sing it, at least sing properly.
Obviously, these two views are at opposite ends of a continuum, and most of us probably sit somewhere between the two.
I'm not sure where I stand on this, but as an example of the dilemma, let's take the song Benjamin Bowmaneer.
The song has a refrain of 'Castors away' which makes no sense at all. A l Lloyd, in the Pengiun Book of English Folk Songs, suggests that it might actually be 'Cast us away' To me that makes a lot more sense, and that's what I sing.
Am I wrong? Or did Mary Spence (who collected the song) mishear it?
Interested in your thoughts on any of the above.