Well deserved. His early work draws heavily on the Bible as well as on the British/American ballad tradition, Longfellow and other poets, and he's amazingly diverse, mastering and transcending several genres.
When he was young and poor I befriended him following one of his first gigs at Gerdes Folk City in Greenwish Village by giving him a ride in my father's Oldsmobile to his girlfriend's house. "Bobby" also caught the undivided interest of a woman I was interested in, the late traditional singer Hedy West.
PS. I agree that Joni Mitchell's large catalogue of exceptionally well-wrought songs deserves recognition at a similar level, though not necessarily a Nobel.