"I write genre, but some say that doesn't count as 'real' literature." I'm not going to lie to you. There's a divide in the art world as a whole. Look at contemporary artists and abstract artists. Look at pop music and classical and rock and (insert genre here). It's weird and divisive and feels as though it shouldn't exist, but it does.
A couple years after I finished my MFA, I went to my first writers conference. Here, each writing group was their own sect. There was the novel group, the poets, the nonfiction/memoir people, the short story people, and the writing for children class. During a group outing of conference participants I went up to some of the writing for children ladies and informed them of how much I enjoyed their reading the day before. They looked at me with open expressions of surprise. I had noticed how they'd been keeping to themselves. How they rallied with each other and didn't tempt to talk to the other genres, but the same could be said for those not approaching them. While the poets, nonfiction, and fiction writers were intermingling the young adult/children's writers were holding tight. I was in one of the short story workshops and had enjoyed their lively reading of their work. It intrigued me and sounded really good. The ladies and I had some pleasant conversation and they gave me a ride back to the dorms. On the car ride home they admitted that they felt out of sorts and not taken as seriously. They were writing for children. To them they felt others didn't respect them as much as the novelists and short fiction writers and thus felt set apart. Which to me was a damn shame cause their work merited respect.
When it comes to "genre" fiction which includes young adult, science fiction, fantasy, thrillers, mysteries, and such, sometimes these can fall into the "literary" category and sometimes not. (And mind you categories are really tools for the publishing/business aspect, not so much for the writers.) Yet it is interesting the vitriol you can feel from someone noting that you are ignorant in what they like and thus they do not respect what you enjoy. I had a critique group member blast me for being a female who did not read (enough) science fiction and thus felt I could not properly comment on his work.
So what can I say to this? I'll take a queue from what I heard at an AWP panel last year on marketing your book. Plainly and with no sarcasm the panel moderator replied to a question about whether one should worry if they upset their publisher should they hire their own publicist. The moderator's response: "F*** 'em."
If you like writing stories that include dragons. F*** everyone else and write it. If you like a hint of magic in a tale about a family dealing with grief so be it. This is your work. It's no one else's. In the end the work will have your name on it. It will be touted as yours from beginning to end and you'll thank some additional people (or many additional people) who helped you along the way. But the good, bad, and ugly you hear from others will be targeted to you about what you created. Would you want to put out something you didn't enjoy to fit into a mold that is not inherently part of your creative process? Is that a no? Yeah, I thought so.
I write stories I'm interested in whether they be flash/short fiction, novel form, young adult, adult, literary, speculative historical, thrillers, or an amalgamation of all these. Whatever strikes me as the right form is the right form and I write it because I enjoy it and feel like that is what works for this particular piece. When I was applying to graduate school and as I apply to residencies and conferences I know where certain things fit. I do know that for the most part the literary works of contemporaries like Zadie Smith, Junot Diaz, and Chimamanda Adichie will be the type of work committees are looking to provide time, space, and money to write. I understand that if I tried to send out my speculative young adult thriller to Yaddo it may very well be tossed away because it's not "literary." But that doesn't mean that there isn't a place for this manuscript. Both projects, not just the young adult book or the story collection about race and family, both are works I am capable of creating and loving and wanting to promote as a source of growth for myself.
We all have our strengths and our passions, so don't allow a larger opinion of what "is" and "isn't" art define what you create and how proud you should be of it. Look at authors like Annie Proulx and Stephen King. Yes, one is making a hell of a lot more money than the other and one has a Pulitzer to their name. And if you presented both to a specific crowd one may be lauded way more than the other. One may be considered the best of their generation and the other boring or melodramatic. But both King and Proulx have a way with description. They have a way with creating characters that stick in your mind long after you've placed their tomes down and moved onto something else. I dare you to find one story or even a passage by either Proulx or King that doesn't strike a nerve or play with form and presentation and style and genre even. I dare you to not find a Stephen King piece that doesn't hit home on a larger scale or a Proulx piece that doesn't freak you out a little.
So, in the end, "f*** 'em." Make what you love and you'll have the respect of those who appreciate what you've created.