In which category does “The Metamorphosis” fall? Literary fiction doesn’t tolerate much speculative imagination; read the current issue of any contemporary literary journal and you’ll see an almost religious devotion to realism. Ghosts appear fairly often, but only if they’re highly metaphorical; you’ll also read the occasional time-travel or quest narrative, yet usually with an ironic appreciation or outright mocking of overdone tropes from those genres. Kafka’s story is about a man who turns into a giant cockroach, yet classifying it as genre fiction doesn’t seem right; beyond the fact of its routine appearance in university literature course, there’s something about it that makes it seem too damn literary to be a genre work.
There’s another mode of imaginative writing that’s generally accepted as literary fiction, and that’s surrealism. The literary writer can create impossible worlds so long as they don’t contain supernatural creatures, alien encounters, or speculative technology. You find surreal stories in contemporary literary journals — not much, but they’re there. What makes “The Metamorphosis” so effective is that it accepts Gregor’s surreal transformation as fact, without attempting to explain how it happened. The bulk of the novella after its unmatchable opening line is about Gregor’s attempts to live now that he’s been inexplicably changed; his altered relationships with his employer and his family are his other primary concerns. After starting with an impossible premise, Kafka’s tale deals with the real-world consequences of Gregor’s transformation.
You can make it weird, so long as you also keep it real. That’s the accomplishment which allows “The Metamorphosis” to retain its literary reputation over a century later.