The about face suggests that, as can be expected, more than one person was involved in the decision. At one point, Administrator X, being a principal influence in the hiring decision, was swayed by the literary reputation and influenced the hiring decision. Then later along comes Administrator Y and notices, "we hired this person who has no Ph. D, OMG!". Viewed from the outside, the school exhibits a kind of disordered, fickle personality: hiring someone for literary reputation without considering paper credentials one moment, and then fussing about the paper credentials the next moment.
I do not say that philosophy itself is irrelevant either to literature or the teaching of literature. I will say that there have been very competent philosophers whose judgment in literature is at least suspect--think of Kant quoting the poetry of Frederick the Great, generally regarded as pretty bad stuff--and that there have been very competent writers on literature whose grasp of philosophy isn't strong.
Shall I go home and remove from my shelves the criticism and poetry of T.S. Eliot, who never bothered to show up and defend his Ph.D. thesis at Harvard?