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I don't agree that it decreased the total expressiveness of English, no. The modern colloquial use of "literally" is not identical to "figuratively", or to "very", or any other word I can think of - it's an intensifier with a unique connotation that doesn't have any good alternative. At worst, we have lost some expressiveness and gained some expressiveness, and there is no objective metric to decide whether that's a "net positive" or a "net negative"; it's just a change.