Dear Ms. Rejecter,
You must help me, for I am incredibly saddened after reading over your archives, notably the Wed. October 11, 2006 entry concerning "literary fiction," which you call "unpublishable."
If I had to classify my work, it would certainly fall into the category of "literary fiction." I do not write Fantasy or Sci-Fi or Romance or Dan Brown-style commercial novels. I want to write literature; and I say that without a pretentious bone in my body.
For example, the novel I'm working on now is set in the Arab world and follows the relationships between multiple families just before the country's revolution, touching on political and religious themes. It is highly influenced by "Anna Karenina" - at least in my own mind. Can this type of literary fiction be published?
If not, how is it that people like DeLillo, Pynchon, Roth, Morrison, Updike, etc. - all contemporary authors whose work is by and large considered "literature" as opposed to commercial fiction - being published? How do Jonathan Franzen and others make it happen?
This is the part where I backpedal and try to explain the huge generalizations I usually make in an attempt to answer unanswerable questions. I've contradicted myself probably half a dozen times by now (Uh, please don't go actually counting...). Nonetheless I will foolishly attempt to answer your question.
As your last paragraph seems to imply, we'll go with the basic assumption that there is a clear definition between "commercial" fiction (here, meaning genre fiction) and "literature" that will be read and discussed and analyzed by lit majors for generations to come. I'll be honest when I say I don't think anyone in higher education will be pulling apart the symbolism in the Dragonlance novels, so you have a point there, but that line is really not terribly clear. People cross it all the time.
The direct answer to your question is not that "literary fiction" or "literature" is unpublishable. It clearly is. You just named six authors who publish what is considered "literary fiction" by people who make these considerations and who have been rather successful financially in the past two years. It doesn't mean all those novels are great - some of them were really riding on the author's reputation for sales more than their particular quality - but they were high lit and they sold, even if they might have had rambling and confusing contemporary/weirdo non-contemporary plotlines or no plotlines at all.
That said, great literature is very, very hard to write. It's even harder to publish. For all they're worth, the Dragonlance novels have a built-in set of readers who are going to buy the next book. A new author does not and is going to rely on the publishing company's faith in him/her and put a lot of money behind publicity to even get it noticed. And of the ones that do get noticed, they're usually noticed because they're so high quality that they win Pulitzers (Jonathan Franzen's The Corrections lost to Empire Falls by a couple votes. I know this because I know someone who was on the Pulitzer committee that year. It was in the final round).
Taste aside, these people are good. These people are, arguably, the best writers in our generation in terms of "high literature." Not necessarily in terms of plot, structure, comprehensibility, or reader enjoyment, but they are what "the literary world" deems as the best of the best. And they're the only literary fiction writers you've heard of.
That's how hard it is to make it in literary fiction. Good luck.