At first I disagreed, which is humorously surprising, as nearly every fic I've ever written (archived or no) has lyrics incorporated in it somewhere, but the more I think about it the more I do like the idea.
I think that song-fics really are a different kind of story. Though there are stories that, like Nikki's referenced to and also as I have done, were majorly inspired by a song (with that song referenced to in notes/summaries/titles), a song-fic, to me, is a story in which an author is able to artfully incorporate lyrics in a way that enhances their writing. While the mood of the story may reflect a song or even a few songs, being able to incorporate the lyrics in a way that does not disrupt the story but quite oppositely compliments its mood and tone is a different form entirely. That isn't to say one is better than the other, or that everyone will agree on how much is too much and etc. but they are different.
But . . . well I'm torn. :p While I do think these stories and authors should be recognized outside of their respective categories, I think the argument of their nominations remaining in those categories makes just as much sense.
So why did you post at all if you just agree with everyone? >.>