He may mean the word no longer has a clear meaning -- it also means "figuratively". Which means it can't be relied on to have any meaning at all.

http://www.merriam-webster.com/dictionary/literally

1 : in a literal sense or manner : actually <took the remark literally> <was literally insane>

2: in effect : virtually <will literally turn the world upside down to combat cruelty or injustice — Norman Cousins>

Well, in either case it is meant to strengthen.

Err..Am I missing a joke? I think they literally mean the word "literally"

That may be, but the rug has been pulled out from under "literally". One will never again be able to assert something ... literally ... and expect to be believed.

http://www.merriam-webster.com/dictionary/literally

1 : in a literal sense or manner : actually <took the remark literally> <was literally insane>

2 : in effect : virtually <will literally turn the world upside down to combat cruelty or injustice — Norman Cousins>

I've taken to repeating it twice. For example, "When the board saw the CEO's plans for the company-wide reorganization, they literally-literally cut him off at the knees"

(As in, they drew a sword and severed his limbs, such that literal-literal blood was everywhere)

Very sad.