In The Millions today, Bill Morris has this great essay on China Mieville entitled, "How China Mieville Got Me To Stop Worrying and Love Monsters."
This is a both a love note to Mieville and a discussion on the mixing of genres. This is an issue that I also feel strongly about. Great reads do not need to be all literary or all genre based. Just because a book has monsters does not make it "lower" than another book.
Morris' essay on Mieville is a great starting point in this discussion. And, if you haven't read Mieville, you should. But if you want to read more, run out to the library and borrow Michael Chabon's Maps and Legends:Reading and Writing on the Borderlands. Specifically, read the first chapter, "Trickster in a Suit of Lights," which contemplates this issue at length. In this chapter, Chabon posits that the best literature is that which is written in between the genres. Works that take a bit from other genres, in his opinion, tend to be the best.
Chabon should know. He is a master who mixes genres in all of his works and has racked up the awards to prove his worth.