Perhaps the issue really boils down to respecting the fact that some performers have a very limited repertoire.

In one group I used to belong to there were a couple of guys with that problem and we generally avoided singing stuff that they knew. This was kind of an unspoken thing, I think that no one wanted to put our friends in the awkward position of not having anything to sing.

I guess it paid off in the end 'cos after we had applauded many a pitiful performance from one of the guys, he astounded us all at a member's concert and really performed well on a new song that he had just learned.