Here's a post on io9 about a discussion between Margaret Atwood and Ursula Le Guin on realism vs. Science Fiction. I agree with their stance: there is no principled distinction between "literature" and "SF". The distinction is between realist literature and SF literature (and realist or SF stuff that isn't quite up to the task). Personally, with very few exceptions I have not been interested in realism as a genre. I find it tedious. If I want realism, I prefer to get it unmodified: as well written history or biography. Further, as they point out in the discussion, realism has limitations in which subjects it can easily take on. I don't believe the same limitations apply to fantastic fiction generally speaking, since any fantasy (and here I include SF as a sub-category) can tackle any of the common tropes one finds in realism.
If you stop to think about it a bit, the whole notion of realist fiction is a kind of contradictio in adjecto. It's fake history trying to appear as mundane as possible. The problem is that some believe this provides it greater intrinsic worth than fiction which fails to meet that arbitrary standard. I've never understood why.
On the other hand, is there really any such thing as an objective or intersubjective aesthetic standard to which we can hope to aspire? Or is it all simply a matter of pose and marketing?