As Sharee said, Tuesday's discussion went back and forth in a vicious circle whether or not there are rules in literature and what is literature and also who decides. I don't really think you can say that there is one group of people who decide what is literature. Yes, it may very well be that rich, fat, white men are the ones who started the input into the the literary canon, but to quote Bob Dylan, "The times, they are a- changing' " and we now consider the works of women authors and other races of authors to be in the canon.
Here is Time Magazines' complete list of the 100 all-time best novels.
You notice something strange in there, maybe under the 'W's? Yes, that is the 1987 graphic novel 'Watchmen', but what is it doing on a list of novels? Maybe these "rich white men" over the decades have expanded their thoughts as to what literature is. 'Watchmen' is a graphic novel , which is the politically correct term for comic book, so why is it the only graphic novel on a list of great novels? What makes it literature? Well I agree that should it is on the list, and the 'rule' for this one might be that it has substance. The story uses many literary devices the further the story, and it was not only a good story, but it combines different genres that worked together to tell it.
So I don't know how to explain what is and what is not literature, because yes, I think it is different for everyone, but there is an example of literature that many people might not even consider.