Yes, in fairness, the academe has not always been good for folk music and folk musicians. But academics have sometimes been meal tickets for musicians as well. Whatever you can say about Lomax's impact on musicians' lives, for example, in many cases they had more money for having met him and gotten the Lomax seal of approval. Cherish the Ladies, the Irish band, owe their existence to an Academic folklorist and an arts center who put together a series of concerts. This has certainly been good for them personally--Joanie Madden once told me she'd probably be an accountant somewhere (shades of GUEST's anonymous drone-robots) if it had not been for Mick Moloney, and hence for academic folklore.As Ian cautions, this kind of intervention does change the tradition and we must be careful. Who's to say whether the existence of Cherish the Ladies is a good or bad thing overall? I think it's probably good, but an argument can be made that it's bad, and an argument can be made that it's irrelevant, to the actual folk tradition.
More generally, I would suggest that there never was a process of "natural" selection at work in folk music, and that some musicians were always selected and marketed at the expense of others, whether because their brothers-in-law owned the pubs or because they were just better at marketing themselves. The tradition, like all historical processes, has always been "a process driven by ordinary human beings with ordinary (not always noble) motivations." So I'm not sure whether changes to the tradition brought about by degree programs will really be something new, or whether they'll just be more of the same kind of process. If anything, I think that having musicians like Anderson, Tweed, et al involved in the process of selecting and nurturing certain musicians will be better than having other people do it. But there is cause to be cautious, certainly...
Steve