your question isn't really about art so much as it is authenticity. Unfortunately I don't have the full text (
http://www.researchgate.net/publication ... cago_Blues) but the gist is that you might consider starting to think about authenticity not as a quality, or a fact, but as an argument. The essay is about blues musicians in Chicago and how the entire structure of blues clubs is set up like con games (think 3 card monte on the street). There are shills, marks, and so on. Everyone fulfills a different role. And when you frame the whole deal in this way, authenticity becomes a wholly different question. It's not even a fact. Authenticity depends on whether the mark has been convinced that the show, atmosphere, performers were authentic. It's as simple as that. If someone has been convinced of authenticity, then it's authentic. If they have not, it's not. Again, authenticity as argument, not fact.
Sometimes cultural producers (i.e. artists, gallerists) try to convince you that something is authentic. Other times it's the consumers convincing each other or raising questions of authenticity that the artist never considered.
So to answer your question: art has lost authenticity when it is commercialized only to the extent that you are no longer convinced it is authentic. To others with less knowledge, the commercialized art may be super authentic. To others with more knowledge than you, the art you consider authentic may be inauthentic to them.