My experience has been with American old time music.

As a survivor of the first "folk scare" and fascinated and amused observer of the second (which is taking place even as we speak), What have I learned?

1. You cannot keep a good tradition down. If the music itself is fundamentally good/valid/sound (insert your favorite positive characterization here), then popularization and modernization will happen whether we want it to or not

2. Lots of wrong people will get excited about the music for all the wrong reasons.

3. Much bad music will be made in deadly earnest.

4. Money will be made by the wrong people.

5. Musicians and styles and regions will be unfairly and ignorantly emphasized at the expense of other musicians and styles.

6. Bad generalizations with be made and promulgated.

7. Purists will debate endlessly.

8. Hands will be wrung.

HOWEVER,

THIS IS NOT A BAD THING!

A good tradition can survive all attempts to kill it with kindness.

It looks like it is just a price to be paid so that the next generation has its chance to rediscover something old and precious.

So, IMHO the net long term results of the first "folk scare" have been positive by a wide margin.
No matter where we started--be it the Weavers, Kingston Trio, Peter Paul & Mary, Steeleye Span--some of us ended up with a love of and desire for the "real thing." We searched out and played with (and drank with) and recorded and documented and venerated the real thing. Today we emulate it to the best of our ability but without being slavish about it. We helped keep it alive and tried to make the job of rediscovery a little easier for our kids.

Looks like the kids will do a great job of carrying on.