No, no, that isn't a value judgement. Don't let's drag the mythical "Folk Police" into this, please. It's a technical term, as you ought to know; and simply shorthand for what was written in the notes to the set of the song printed in The New Green Mountain Songster, 1939, which was precisely as follows:

"From Lilith, the wild woman of perilous love, and Morgan la Fée, to the mood of a street ballad about one of the many Irish youths who have lost their lives in fresh water, is a long leap. But The Lakes of Col Fin takes it. Irish singers understand the lore of the ballad perfectly: Willie was not "drowned"; he was taken away to Tir fa Tonn, "Fairyland-under-wave", by a water-woman who had fallen in love with him. Legends of similar content are frequent in Middle Irish literature and have survived into modern popular tradition. We may compare Motherwell's The Mermayden, whose "bower is biggit o' the gude ships' keels, and the banes o' the drowned at sea" - a grim picture of the supernatural woman's cruelty in love, which the poet nicely caught - and Leyden's The Mermaid of Corrievrekan, with a happy ending wrought by a clever hero who inveigles the mermaid into taking him back to bid farewell to his former love, "the maid of Colonsay". Both poems were based on local traditions and legends.

"Popular tradition, however, does not mean popular origin. In the case of our ballad, the underlying folklore is Irish de facto, but not de iure; the ballad is of Oriental and literary origin, and has sunk to the level of the "folk" which has the keeping of folklore. To put it in a single phrase, memory not invention, is the function of the folk.

"The Lakes of Col Fin was first printed by Dr P. W. Joyce in 1872, in a version, with the air, obtained from a County Limerick singer. A full history of the ballad and of the folk tradition pertaining to it is in Folk Song Society of the Northeast, Bulletin No. 8, pp. 9-12.

"Mrs. Flanders met this ballad as The Lakes of Champlain while talking about old songs with Mrs Herbert Haley of Cuttingsville, Vermont. Mrs Haley sang the words to the tune of The Dying Cowboy, and had been told that the drowned boy was "Willie Lanard", well known to the person who gave her the song."

-Helen Hartness Flanders, Elizabeth Hartness Ballard, George Brown and Phillips Barry: The New Green Mountain Songster: Traditional Songs of Vermont, 1939; reprinted Folklore Associates, Pennsylvania, 1966.

Now, as it happens, this kind of romantic tendency to attribute "ancient" and supernatural origins to traditional songs without an atom -apparently- of real evidence was still pretty common in those days, though we tend to be a little more sceptical nowadays. It may well be that whoever wrote the above (perhaps Mrs Flanders, a rather well-known and respected folk song collector and folklorist) might see it differently if she was writing today; perhaps not. I don't pretend to know. Certainly I'd question the relevance of the references to Scottish literature. She was also unaware, it seems, of the numerous broadside printings of forms of the song that pre-date Joyce (but not by a great deal; there seems to be no evidence that it is older than the 19th century); but again, she is not to be blamed for that. Scholarship and technology have moved on, and today resources are easily and trivially available to us which were often unknown to scholars of the day.

In case there is still any doubt, I had better explain that the use of the term "degenerate" in this context (though it was Felipa's gloss, not actually used in the book referred to) simply implies that a song has lost elements that might originally have belonged to it; and, along with them, part of its original meaning. In that sense it might properly be said to be "degenerate", but this doesn't imply any aesthetic criticism; just an objective observation.

I'm inclined to doubt that Mrs Flanders (if it was she) was right about this one, but that's just my opinion; which, though moderately well-informed, enjoys the benefit of hindsight which was not available to her. I won't ever know, or understand, as much about folk song as she did; and I doubt that any of the other contributors to this discussion will, either.