Great points ... it's why we have taxonomies and objective definitions and are able to define a dog as "a member of the species canis familiaris" ... and why one objective way to define bluegrass music is by the instruments it's played on. Bill Monroe and fellow purists might have hated hearing Led Zeppelin songs played on banjos and fiddles, but they couldn't have barred that music from sanctioned Bluegrass festivals using their own rules.
I think we can objectively determine whether a given ensemble falls within one definition of bluegrass or another, but I have a hard time believing that a definition itself is objective. I get that some BG festivals have limitations on non-acoustic instruments, but definitions of a genre can drift and expand without becoming useless.