"...also comment on FL programs giving up literary studies. Is there an intrinsic reason why literature has to be what these programs study in year 4? (intrinsic = not having to do with history of discipline)"
This question from Leslie is very good. I would say that the Spanish major (or French major) should have some of the characteristics of the "educated native speaker." Not every native speaker has read much literature, but there is a sense in which you aren't educated in that language if you haven't read some books.
The main place you see it is in vocabulary. You simply cannot be exposed to an adequate-sized vocabulary without reading. A lot. Reading also makes certain grammatical structures second nature. If you have read a lot, you will never write "según a" instead of "según." To be exposed to the sheer amount of input through conversation would be impossible.
Literature also gives you a historical sense of the language that you don't get if you only read contemporary non-fiction. To know what a style would look like from 100, 200, 300 years ago.
If we look at what a degree in Spanish would prepare you for, you can think of teaching (you'd want a teacher to be able to teach AP literature), graduate study, journalism in which you'd want someone covering the Hispanic world to have some knowledge that educated people do.
Since we don't hand out degrees to native speakers of Spanish without taking courses, we wouldn't hand out degrees in English to all of our students just because they have been educated in English. There has to be some content there. Literature tends to work best because we can't read it in translation, merely for its informational content.