Prof Michaels is right and he's wrong. We could use a few more novels that read like The Wire and devote themselves to class struggle and social justice. But they don't need to come at the expense of other kinds of novels. I am at a life stage in which I am going to be as self-indulgent as I like, especially as people at a nearby stage often have forgotten how to lead any kind of interior life at all and occasionally like to read about how one works and how one doesn't.
There is always room for another kind of novel, and another, and another. There are plenty of former journalists in great positions to write social justice novels. In fact, I believe that in the near future, what we think of as "journalism" itself will be more dependent on fiction than ever before. But we shouldn't think in terms of an either-or, of a limiting, but of expanding.
Also, re profs and "lit journalism," yes, I did: I said that.