Salman Rushdie started as a Sci-fi author. Then he moved into "Magic realism", which is Fantasy without the barbarians and buxom wenches (or more eloquently written barbarians and buxom wenches).

"Literature" is the label for works that are good enough that everyone should read them, not just genre fans. "Romance", "Sci fi", "Travel", "Crime", "Comedy", "Detective", "Drama" and so on are works that aren't good enough for everyone to read.

Of course, there's writers who hack their way into the "Literature" section by imitating the quirks of a genuine pieces of literature, or just avoiding all the other categories.

No, "Literature" is the label for works of middle-class introspection, whereas "Genre" fictions are books that are about any other subject matter.

If you move from actually having a subject to making your subject a metaphor for middle-class internal conflicts, you have made the move from Genre to Lit.

DAAAAMMN thats a fine definition.

Yes, that's why I refer to the kind of works you mention with the label "speculative fiction". They are really sci-fi but they have reached a level of social import and acceptance -- upon which they get labelled as "speculative fiction" rather than "sci-fi".

"Speculative" is just used to bring fantasy and alternative history and other "what if the world worked under different rules? " material under the same umbrella as lasers and robots and starships. It is not a marker of quality level.

Never said it was a marker of anything. There's good and bad speculative fiction like there's good and bad any other sort of fiction.