From what I've read on Nobel Prize's for Literature, they have not always been without controversy. While they can be in recognition of a particular work, they are also often in recognition of the collected works of an author, especially when the authors are poets. Just browsing the official page for thee Literature prize, the brief summary for each prize winner is more general and infers a collected intent. Hemmingway is one of the few winners that is referred to for a specific work.
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With Dylan, I suspect the intent of the prize is to mostly recognize his work from his start through the early 70's when he was at his best.
And, I'd hardly say that Lennon and McCartny deserve one. The biggest limitation being that you cannot win a Nobel prize unless you are alive. That rule has actually proved to be a problem for a few would be winners who died in the year they were to win.