From American Heritage below. They seem to indicate that this has been "misused" for a long time. I use ding people for this, but now I think its overly pedantic, and now I think I'm technically wrong to even ding them.
"Usage Note: For more than a hundred years, critics have remarked on the incoherency of using literally in a way that suggests the exact opposite of its primary sense of "in a manner that accords with the literal sense of the words." In 1926, for example, H.W. Fowler cited the example "The 300,000 Unionists will be literally thrown to the wolves." The practice does not stem from a change in the meaning of literally itself -- if it did, the word would long since have come to mean "virtually" or "figuratively", but from a natural tendency to use the word as a general intensive, as in They had literally no help from the government on the project, where no contrast with the figurative sense of the words is intended."