Considering the bible is not even a cohesive work with a single style, language, or even writer, it really never stood a chance of standing next to the Illiad as a work of literature. It's importance, besides the obvious importance of a particular translation itself, is solely historic, cultural.
This is so tendentious a thing to say as to just be weird. Do Northrop Frye, Harold Bloom, M. H. Abrams, and pretty much every other scholar who has written about it, not know what literature is?
If they think it stands on it's own literary merits, then they are deluded. The Iliad is far more sophisticated.
If we want to talk about importance then that is another story, but merely on the quality of writing there is hardly a comparison between the two.
"The Bible" is a curated though disorganized collection of confused and contradictory prose and poetry, many of which were evolved rather than written, filled with massive sections of irrelevant tedium (Have you read Numbers? I mean honestly...). Together it only forms a cohesive work with logic-defying "interpretation".
The King James translation has literary importance for it's influence on the English language, and the collection in general obviously has immense historic importance, but other than that? Yeah... no.
On the other-hand the Iliad is a masterpiece of epic poetry and a fine example of writing by all standards. No excuses need to be made for it, and that really is the most telling thing to realize.
Thanks for expanding. But doesn't this boil down to hair-splitting over the definition of "literature"? Does folklore count as literature? Many scholars would say yes, and have given it serious literary study, yet it doesn't even exist as a canonical text.