It is untrue that fiction is nonutilitarian. The uses of fiction are synonymous with the uses of literature. They include refreshment, clarification of life, self-awareness, expansion of our range of experiences, and enlargement of our sense of understanding and discovery, perception, intensification, expression, beauty , and understanding. Like literature generally, fiction is a form of discovery, perception, intensification, expression, beauty, and understanding. If it is all these things, the question of whether it is a legitimate use of time should not even arise.
Fiction is one of the few experiences where loneliness can be both confronted and relieved. Drugs, movies where stuff blows up, loud parties -- all these chase away loneliness by making me forget my name's Dave and I live in a one-by-one box of bone no other party can penetrate or know. Fiction, poetry, music, really deep serious sex, and, in various ways, religion -- these are the places (for me) where loneliness is countenanced, stared down, transfigured, treated.
Life is infinitely stranger than anything which the mind of man could invent. We would not dare to conceive the things which are really mere commonplaces of existence. If we could fly out of that window hand in hand, hover over this great city, gently remove the roofs, and and peep in at the queer things which are going on, the strange coincidences, the plannings, the cross-purposes, the wonderful chains of events, working through generations, and leading to the most outre results, it would make all fiction with its conventionalities and foreseen conclusions most stale and unprofitable.