Does the evolution of hand tools to modern, powered, or computer-based tools and technologies somehow vitiate or even negate the core concepts of "craft" production? 

While the operative definition of "crafts" that is central to this overview is "Practices which employ manual dexterity and skill, and an understanding of traditional materials, designs and techniques to make or repair useful things," the emphasis on "manual dexterity and skill" may be qualified by historical and modern-era developments in the tools used by craft producers.

The concerns here are:

1. The historic origins of the tools, and

2. The complexity and contemporary availability of tools that are used...

For centuries in the pre-industrial eras, hand-powered tools were the only options for producers of crafted objects.  

Nevertheless, improvements in hand- or human-powered machines came rapidly during the early years of the Industrial Revolution.  For example, the earliest sewing machines of the late 18th century were tools used by specialized workers, such as leatherworkers or sail-makers; but by the mid-19th century, home use of sewing machines — still hand- or foot-powered — exploded, and for good reason: A sewing machine could produce a man's shirt in about one hour, compared to 14½ hours by hand. 

     The Industrial Revolution saw the creation of many types of "machine" tools, powered by steam, water-power, and (much later) electricity.  While accomplishing the same sorts of transformations to the raw materials used for crafts, powered machine tools increasingly have supplanted their hand-tool predecessors in various crafting contexts, permitting faster production.  

     The development of machine tools also resulted in accelerating degrees of programmatic craft production, allowing for processes that repetitively produced standardized products.  Thus, in the domain of fiber and textile crafting, card-driven Jacquard machine looms began in the first years of the 19th century. Though based on earlier concepts, these looms revolutionized textile production, permitting the commercial creation of complex fabrics such as brocades and damasks. The Jacquard technology, based on punched cards, is also said to have inspired Charles Babbage in the development of his "Analytical Engine," a key forerunner of 20th-century computers.  

20th Century:      In the United States, a revolution for woodwork began in the mid-1920s with the invention of affordable electric tools—initially drills and saws pioneered by such companies as Black & Decker, Milwaukee, and DeWalt.  These enabled faster, and in some cases more accurate, processing of wood in every aspect of furniture crafting and building construction. Tools powered by compressed air—especially hammers and drills—soon followed. 

     The post-World War II era saw further revolutions in materials, particularly in synthetic plastics and resins, many of which have found their way into the hands of creative crafters.  Moreover, in last half of the 20th century, such complex tools as digital computers and lasers have continued to expand the range of creative and decorative techniques used by 20th- and 21st-century crafts producers.  Thus, today's woodworking crafts producers may choose to use CNC (Computerized Numerical Control) devices to predictably and repeatedly shape component pieces of their products—or to produce multiple identical copies of a product in a single "run."