I think it's great and I'm not surprised. I kind of saw this as a possibility when he was awarded the Pulitzer a couple years back. Songwriters have always been an important part of our literary landscape, especially in the last 50+ years, and it's good to see that being recognized. Hopefully, this will open the door for a few more deserving candidates, like L Cohen and Tom Waits.
Now that the paradigm is shifting as far as what is accepted as literature, I think film making should get some consideration as well.