The hard line is the music.
The art of this form isn't in plain words on the page. It's in the sound of several different art forms coming together to make something new. I don't see it as dissimilar to screenplays, which nobody would claim as films.
Song lyrics aren't written to be read. They're written to be performed. Out of context, outside rhythm and tone and backbeats, they make less sense.
It's like they're giving him the prize for written words that represent maybe half that art, if that.
(This is aside from the committee giving people like Murakami, Atwood, DeLillo, and Pynchon a very noticeable slap in the face.)
Edit: I'll stop now. Reading articles about it and thinking about it is making me ranty.