I have long held that literary fiction and genre fiction were not in any way mutually exclusive. There have been many, many shining examples of very literary genre writers. Now people are starting to notice that there are many genre-leaning literary writers, too.
www.pw.org/content/invasion_genre_snatchers
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What Took So Long?
I don't understand why it's taken so long for the litfic community to genre tropes don't necessarily relegate a piece of fiction to the lowbrow waste bin. Didn't these people ever read Kafka?
Genre folks haven't exactly
Genre folks haven't exactly made it easy for them. Pulp SF, schlock fantasy, and formulaic writing have been dragging down the entire image of genre fiction.