Seems to me there are some issues here:
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Tunes often have a history of being played in a particular key. This might be because they were pipe tunes, or fiddle tunes or whatever, but a tradition has developed around playing them in that key. If you want to get along with the rest of the world you ought to learn those tunes in those keys. They shouldn’t be shoved into the !# 2# world.
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Some tunes don’t have that history and/or players of a particular instrument can’t reasonably play in that key because of the limits of the instrument they play on. Pieces in the key sig. of F major or Bb major for instance are awkward on D whistles, and can be darn near impossible on Octave tuned hammered dulcimers. If you play consistently with those folks (or lap dulcimer players who are not yet at a high level) you may have to give in to their changed keys. Ross’s Real #4 is a great tune in F major, but my friends who play octave tuned hammered dulcimers will not play it in that key. Neither adjusting notes nor finding the hammer patterns seems to work out for them. So they change the key and I don’t play that tune with them because I don’t like how it sounds in the changed key.
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When you play by yourself and for yourself or with a regular ensemble all bets are off and you can do what you wish.
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Sometimes changing the key is a truly unnecessary thing to do. Many folks play Margaret’s Waltz in G, but it really does sound better in A and can usually be played in that key. There seems no reason for the change except convenience…convenience that destroys some of the characteristic sound of the tune…at least to some of us.
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If you really learn your instrument you can probably play in more keys than you think. You can drive mediocre Hammered Dulcimer players out of a jam by playing lots of things in C, but the good players are just fine with that. That example can be multiplied.
Enough…Its late .