It's not hyperbole. When you say something was "so funny I died", that's exactly what 'figurative' means. I don't object to the use of the facetious/sarcastic/exaggerating use of 'literally', but when used in that way, people are literally (sorry!) being figurative. I think the problem arises when something in speech starts out being sarcastic or out of proportion consciously, but gets used so much that people forget this and start changing the actual meaning of the words being used. I think it often comes about because terms and phrases get re-used by people who don't actually understand them... like a small child repeating a pun or quip they've heard an adult use, but don't really understand, and then they grow up using some part of speech incorrectly.