“the result of that war {mexican war} was lamentable not only for our country but also lamentable for the reputation of the americans. the despoliation which we suffered was qualified as a real robbery even by citizens of that [wars] cost, also, much bloodshed which, when poured out in order to serve injustice and oppression, does not pay at all, for it does not even receive the applause of history." –mexican history textbook

identify a likely point of bias in the source material quoted above.

..."order to serve injustice and oppression, does not pay at all, for it does not even receive the applause of history."

This point qualifies as a biased source material. The Mexican History author distillate his own perspective about the outcome of the war. Judging by his declaration of Mexican heritage, (... not only for our country...) the author gives a very uncomfortable, and furious opinion about the American action during this war, and in the end makes a huge generalization about the viewpoint of other authors about this war. Mexican War resulted from the Annexation of Texas, declared by a joint resolution of Congress  in 1845, infuriated Mexico. The newly elected president, James K. Polk, sought  to acquire California and New Mexico as well as Texas, but negotiations soon  failed. When Mexican troops crossed the Rio Grande, Polk urged Congress to  declare war.

the answer to your question is true

dylan has written many enduring songs and he has received several awards for his musical achievement;  

any written work with artistic value can be considered literature; especially if such work is publicly recognized, and has had importance and endurance among people; whether is poetry or fiction or drama or even criticism, since it's the transcendence and representation of a culture, language or people in a period of time to more people, using letters (words), regardless the subject.

the nobel prize in literature is given to authors from any country based on a body of work as a whole that inspires and nurses the life of humanity.  

and the work of bob dylan matches that description, therefore is well deserved since he'd created new poetic expressions within the american song tradition, that has inspired and influenced the lives of many people, not only withing the united stated but worldwide as well.