Although it's factual, many people put their fingers in their ear and scream when you mention point (2). I would extend that point to any prestigious award.
To argue a bit I'd say that the science prizes have it a bit easier.
Here's the criteria that Alfred Nobel set out in his will[0] for the literature prize (kinda badly translated from 19th century Swedish): "one part to whom in literature have produced the most excellent work in an ideal direction".
You have had 18 members of the Swedish Academy debating what the hell that means since forever.
