making too much of the literal meaning

Can we really make too much of a word’s (auxiliary verb, noun, whatever) literal meaning? If literal meaning can be dismissed so easily, what is the need for dictionaries? For that matter, what would be the point of AWAD? Why would anyone care about a word’s literal meaning if no one else did? All one would need to do is make up his or her own definition for the word and use it. Doing so might make communication rather difficult, of course, but if literal meaning were not important, who would care?