What is Literary Fiction, other than what's left after you take away all the other genres? I think it is generally accepted that literary fiction is more in-depth, takes on more serious subject matter, and deals with the inner life and what makes us human — although that could mean just about anything. As Justice Potter of the US Supreme court said about how to identify pornography: I know it when i see it.
I think most of the books that are considered within this group were not written with the label Literary Fiction in mind, they were just written as stories. Ultimately when you look at a novel of whatever genre the main thing it needs to achieve is to tell a story and to tell it in an interesting way and I think that applies to all genres equally.
The problem with the literary genre is that when you try to critique it, because it doesn't have fixed parameters, it is very easy for the writer to squirm out of answering those criticisms head-on. A slower pace, a lack of purpose, a denser use of language are all things associated with this type of writing. But a story is either interesting or isn't and even though tastes differ, I think most people. like Justice Potter, can spot a dull tale when they see it.