Literally has meant figuratively for centuries, and the complaint is newer

These are listed in the order worth acting on, which with the intensifying use of literally is not the order they are usually presented in.

The complaint

The objection holds that literally means according to the letter, and that using it about something not actually happening reverses its meaning. This is presented as a recent decline, usually blamed on young speakers, casual media or general carelessness with language.

It is a satisfying complaint because the contradiction is easy to state and the examples are often genuinely funny. The strength of feeling is real, and dictionaries adding the sense have prompted public irritation more than once. What the complaint gets wrong is the timeline, which is considerably longer than anyone objecting tends to assume.

How old the usage is

Writers of substantial reputation used the word as an intensifier well before the modern complaint existed, and did so without apparent embarrassment. Examples appear in novels and essays from earlier centuries, in contexts where no literal reading is possible or intended. The usage was therefore established in respectable prose long before it became a marker of sloppiness.

The primary source says otherwise: historical dictionaries record these instances, which is why the entry is not a recent capitulation to modern speech. The complaint dates from a period well after the usage, which is the ordinary pattern for usage disputes.

Why it happens to this word

Words meaning truly, really, very and terribly have all drifted from precise meanings into general intensifiers over time. Really once asserted reality, verily asserted truth, and awfully once meant inspiring awe rather than to a considerable degree. Intensifiers wear out through use, so speakers reach for stronger words, which then wear out in turn.

Literally was recruited because it was the strongest available claim to actuality, which made it the natural next candidate. The process that produced the current usage is the same process that produced most of the intensifiers nobody objects to.

The contronym objection

A word that can mean its own opposite feels intolerable, and this is the strongest form of the complaint. English contains a number of such words, including some that mean both to fasten and to separate, or both to remove dust and to apply it. Context resolves them almost every time, which is why most people never notice they are ambiguous at all.

Genuine confusion caused by the intensifying use is rare, and where it happens it is usually the joke rather than a failure of communication. The theoretical ambiguity is real and the practical difficulty is very small, which is an uncomfortable combination for a strong rule.

What dictionaries are for

A dictionary records how a word is used by the community of its speakers, including uses the editors may personally dislike. Adding a sense is not an endorsement, and the entries usually carry notes indicating that the usage is disputed or informal. Readers frequently interpret inclusion as permission, which is why each such addition produces a round of newspaper articles.

Checked against the record, the alternative, a dictionary that omits common usages on principle, would be less useful to anyone trying to understand what they read. This misunderstanding of what a dictionary does is the engine behind a large fraction of public language controversies.

Printing a correction has a poor record of taking a myth out of circulation.

What to actually do

In formal writing, avoiding the intensifying use costs nothing and prevents a certain kind of reader from stopping to be annoyed. In speech it is established, widely understood and considerably older than the people usually blamed for it. Knowing the history means the choice can be made on grounds of audience rather than on a mistaken belief about decline.

Where the story actually begins, it is also worth noticing which usages attract complaint, since the pattern often follows who is speaking rather than what is being said. The change is old, the objection is newer, and both are now part of the word's record.

Everything above, in order of what to do first

1. The complaint. The objection holds that literally means according to the letter, and that using it about something not actually happening reverses its meaning.
2. How old the usage is. Writers of substantial reputation used the word as an intensifier well before the modern complaint existed, and did so without apparent embarrassment.
3. Why it happens to this word. Words meaning truly, really, very and terribly have all drifted from precise meanings into general intensifiers over time.
4. The contronym objection. A word that can mean its own opposite feels intolerable, and this is the strongest form of the complaint.
5. What dictionaries are for. A dictionary records how a word is used by the community of its speakers, including uses the editors may personally dislike.
6. What to actually do. In formal writing, avoiding the intensifying use costs nothing and prevents a certain kind of reader from stopping to be annoyed.

The takeaway

The usage is older than the complaint about it, which is true of most things people describe as the decline of English.

The satisfying version of a story is the one that travels, which is the whole problem.