We've spent a lot of time on this question and there are several threads covering it. One thread that you might want to read before we really wade into this one is The Genealogy of Bluegrass. We actually got to the point of proposing definitions and enhancing them without calling each other names. <g> You took the time to comment in detail so I'm guessing you're actually interested. Read the thread I linked, search for others with "bluegrass definition" or terms like that and come on back. This subject usually generates a rousing discussion between knowledgable participants.

Asside from the definitions, it helps to understand that one thing bluegrass is not is a big singalong. Regardless of the origin of the tune being played or one's definition of bluegrass or the skill level of the players, you really want just one of each participating instrument and just one of each vocal part if you hope to create a sound that fits some (any) definition of bluegrass. It may be that sort of thing that your friend objects to rather than the genre from which a particular tune originally came.

      - Mark