The literally replacing figuratively is supposed to denote the hyperbolic nature of what is being said, no?

Like: omg, I'm literally ded.

Everyone knows that that it is impossible, but we saying to give emphasis to what is being said.

So, it's really just a hyperbolic device. Language is funny like that, but I can't see how it's wrong since I think the absurdity is part of the intent of use.