Literally - "in effect : virtually" [1].
Even someone who thinks that language should not be rule-based still should not use it, if their goal is to communicate clearly and concisely---since it does not achieve that.
So ultimately, it is incorrect regardless of your views on rules of language.
"Literally" has been debased by overuse for emphasis, and now it no longer means what it used to mean.
See e.g. https://nowtoronto.com/news/in-defence-of-the-figurative-and... and http://www.theguardian.com/science/shortcuts/2013/aug/14/lan... for more discussion.
> it is incorrect regardless of your views on rules of
> language
However, regarding:
> That isn't correct usage
It's also incorrect to use wood to build a house that is twice the thickness needed.
It's also incorrect to build a rocket that uses an inferior type of fuel.
These are not matters of social dictat.
We don't need an Academie francaise for English because we should be taught the above principle in school and we should correct others when they make mistakes, in appropriate circumstances.
Another principle: We should change the language to improve it when it is trivial to do so; so even if "literal" were well-established in the opposite meaning, we now know better and should stop doing it. But I do not believe it is well-established, despite the article you linked.
You talk about language as being "confusing" or "inferior". You clearly have strongly held criteria for those. Where have they come from?
Has the English language changed in the last 1,000 years? How have you decided which of those changes to adopt? Were all those changes improvements, given your strongly held criteria? What about in the last 500 years? Which year did the version of English that you believe is most "correct" or "superior" occur? Are we currently at "peak" English?
What improvement would modifying the meaning of "literal" bring? Do you know what the word etymology means? Does the etymology of "literal" support your desire to change its meaning? If the root of a word has subtly changed between its Classical roots and emergence in Anglo-Norman French, Middle English, or whatever, which of these is superior? If the root is unclear, and could be Latin or Greek, and has subtly different meanings, which is the right one to use? What about modern English words that have been adopted from - say - Hindi?
...
Having pondered those, perhaps you could examine the rest of your comment. In the phrase "the thickness needed", what criteria define 'needed'? Cost? Durability? Ability to restrict noise? Foundation strength? Could these criteria change from house to house? Could people hold different opinions on those subjects, and both be right? In the phrase "inferior type of fuel", what constitutes 'inferior'? Could safety margins vs cost lead two experts to come up with different opinions on which fuel was superior?
What would be helpful would be a counter-argument, if you have one.