Yes, communication works best when people agree on what words mean, and a great, great many people have agreed that "literally" means things other than "literally". It's not gibberish to use it as such.
It's not a dishonest argument at all. Language is not prescriptive. It's constantly evolving. New words are invented all the time, and old words take on new meanings all the time.
Do you ever use "awesome" to mean "super cool"? Congratulations, you're misusing the word! How about "egregious" as in a bad error? Wrong! How about "fantastic" as meaning "wonderful" or "great"? Also wrong.
Even when words do have specific meaning, if you don't know the meaning they are useless to you, so it might as well be gibberish. Can you speak Swahili? Does that mean it's gibberish? Of course not.