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I would like to add my input to this:
I believe the Lit Portal would improve NG's overall submissions. Yes you might have the stories about penises and vaginas but there are already animations and games about that crap. Ok so let me explain, coders and artists don't always have the best "storylines" for their projects, and a lot of submissions go with simple plots, or even no real plot at all.
Having the Lit portal would definitely draw coders, animators and writers closer together. Say you wanted to work on a project, something bigger than anything you have done thus far. Do you really want to throw some cheesy or crappy story line to back it up? No, do a little research, read a little from the lit portal, find a writer who you enjoy their story/style from. Ask to collaborate or permission to turn their story into a game or animation.
Honestly in my opinion this would bring more better games to the site. What's the point to be against a Lit Portal? It wouldn't be like the stories are being force fed to you.