Okay, but when you say
wanted to be writing literary fiction [...] and [...] tried to sell it (or workshop it) as sf.
do things like surrealism and fourth-wall-breaking automatically qualify a story as sf? ... I suspect the Slipstream entry was written by someone who would say no
Where did you get the "as SF" part? The section of the Lexicon in question purports to be "common workshop types". How exactly do you workshop a story "as SF"? I wouldn't be at all critical if my imagined Damon was saying "hey, you should try Zoetrope and Fence for this one" -- as opposed to pointing imperiously at the door. It's the whiff of genre-ethnic-cleansing that has me annoyed.
I don't think that breaking the fourth wall, or surrealism, makes a story SF. But nor do I have any idea where the not-SF-ness and the undeniably snide tone (you don't think the bit about postmodernist criticism is meant as a serious suggestion, do you -- however well it in fact worked for Tales from Neveryon?) go together...
Similarly, while I accept that it's a Lexicon and not a rulebook, presumably the point of the Lexicon is, if you will, as a set of anti-patterns. You can write a very bad alien invasion story -- indeed, almost all are bad -- yet "alien invasion" does not make the list as a category. The point of Waldrop's mini-essay there is to define what about Tabloid Weird stories is bad, not just to mention a category which, incidentally, is sometimes bad. He says "Sasquatch crypto-zoology and Christian folk superstition simply don't mix well" -- note the just simply.
And in fact, the only use of the Turkey City Lexicon which I have actually observed in the field is to dismiss a particular story because (and simply because) it suffers from one of the items on the list.... and while this can be a convenient shorthand, it is perilously close to rulebookery.
I do not mean to imply, in that last paragraph, that all the newbies are groping toward new forms. Indeed, in that groping they are far more likely to reinvent the wheel. The problem is that the frustrations of those who have seen too many wheels reinvented, and grown snide about it, are among the stabilizing forces of quasi-formulaic genre homogeneity.
The problem is not criticizing a flawed story. The problem is that these kind of categorical criticisms -- "distinguish between a rational, Newtonian-Einsteinian, cause-and- effect universe and an irrational, supernatural, fantastic universe!" -- these instances of "don't even go there, it never works" -- are an easy out for critiquers to avoid addressing the technical hurdles that would have to be overcome for it to work.
Some of y'all have, elsewhere, been railing against "merely competent", tame, workaday writing, writing that offends no one's ear, takes no chances, is comfortably salable and achieves nothing important. I believe such dicta -- even in catalog rather than rulebook form -- are one important source of it.
(And I would distinguish between the SH list, which is a market list about what things you want to buy, and a list intended for workshopping. Every editor is welcome to draw genre borders for inclusion, not to mention to have their own peculiar itches, peeves, and fetishes, it's part of what gives magazines etc. distinctive characters. When that editor sits down to critique in a workshop, though, I would expect her to take a different view, trying to get each story to be what *it* should be, even if that's something they would never buy in a million years).