Are inexpensive ryokans inauthentic?

I've stayed in a ton of inexpensive ryokans in the countryside. A low-end "ryokan" is basically the same thing as a "minshuku". I certainly wouldn't call them inauthentic. Indeed, sometimes the tatami and bedding were frayed, and the bath was not fancy -- but the service and food were good even at the cheap places.

No. There are just two rather different types of accomodations that serve different functions and markets but both call themselves "ryokan" - and fully justifiably so, since the word just means "inn", and according to Japanese hotel laws, if the rooms are Japanese style, it can call itself a ryokan (the details are considerably more complex, and there are sub-categories).

On the one hand, you have ryokan that provide simple accomodations for travellers going somewhere.

On the other hand, you have ryokan that are, themselves, a place people go to in order to sleep in a luxurious room, eat fancy food and see beautiful gardens and landscapes (and, often, take a bath in a hot spring in the middle of those). Obviously, these are far more expensive.

But by no means is the first type inauthentic. In fact, it is arguably more authentic, since that's all that such accomodations were originally: places for travellers to sleep (though of course some catered to much richer travellers than others). The second type is a more recent development, probably grown out of traditional ryokan in remote places adapting to increasingly fast transport options: when people can go from city A to city B without having to stop in the countryside C in between, then the inn at C has to find another way to attract paying guests if it is to survive.

Update: Still, jpatokal has a point: when a Japanese person hears "ryokan", the first thing they think of is the high-end onsen ryokan that they may sometimes treat themselves to as a vacation. But that definitely does not mean that anything else calling itself ryokan is a fake designed to rip off foreign tourists who don't know better.

On top of what Michael said, there is only to add that this myth that Ryokans must be expensive comes from the issue that Ryokans are normally not as space-effective as modern hotels - and therefore more expensive when it comes to downtown locations.

The maintenance costs for wooden build type of the room, the tatamis and the "live in your own home" style service level is not manageable for a 300-room sized Ryokan - next to the fact that a 15-floor building is not really what you would call traditional Japanese architecture. But if you want to pay the real estate costs (i.e. inheritance tax on property, etc) for a downtown location such as the famous Tawaraya inn in the middle of Kyoto, you will have a certain pressure to either be expensive or convert into a western style hotel where you have a much higher sqm-efficiency to justify the investment. The cheaper ones left in Tokyo can most probably survive because they are so rare and therefore ARE popular with tourists, have a high occupancy and are able to pay their bills.

Therefore, cheaper ryokans can be much more found in country-side locations and generally not so crowded places than downtown Tokyo or in the heart of a tourist destination. They can still offer the environment, but do not have the pressure to make room for a 70-floor high office tower.