Well Rich, I think that there are two problems herewhich are being treated as one.

Firstly, Musical education in schools is pretty much like the rest of the education - abysmal. Only about 5% of teachers do any real teaching in ANY subject, Animaterras are few and far between. I was fortunate that our music teacher used to sit at the piano and play folk songs and got boys singing so that he didn't have to teach music.
I learned to love singing, but learned bugger all about music. It's really a general problem with education.

Secondly, Folk music is not dying, it is changing. It always has been changing. Unfortunately we think of folk music as a specific selection of old songs. That is exactly what it is, BUT, that is OUR selection. The public selection changes with time.

Folk songs are really the songs that ordinary people sing and ordinary people mainly sing songs that were popular when they were young. Mass media hasn't really changed anything, it has just speeded up the process so that the bad songs die quicker and we have a wider selection and better access to newer good songs.