It should not be overused any more than it should be underused. Not every book is meant for mathematics. Using literature in math instruction has several advantages. Literature provides a way for children to make mathematics learning much more personal. Research has shown that children learn material best when it has meaning and usefulness for them.
Literature is a way to give math meaning.
One of the major elements of mathematics instruction emphasized in recent years has been to teach children problem solving skills. Literature is a marvelous tool for supporting problem solving learning. The books act as word problems, but they are word problems with some interest to children. A wonderful example of a book that can be used in this way is Pat Hutchins' The Doorbell Rang . The children in the book have a batch of cookies they are trying to divide among themselves.