I agree pretty much with all that has been said so far, from all sides of the argument.
I'm into all kinds of genre of music - some which is heavily lyrically based in terms of meaning (like folk), some which is lyrically based to create the main sound of the songs (pop, in some ways, rock in others) and some which contains little or no lyrics at all (drum & bass in the most part, some classical).
It works for some stuff but not others. For example, my favourite bands (in case you don't know already) are Pendulum, Green Day, Mumford & Sons, Noah & The Whale and The Qemists. Let's take each one through and look at whether they use lyrics or not and whether or not it works well:
Pendulum - they use a mix of lyrics to compliment the drum & bass in some songs, but many others have none at all. They usually get it right in terms of what songs fit well with lyrics and which ones don't, but admittedly, the lyrics are not always as good as they could be. they tend to fit the theme of the album well but deeper meaning is sometimes lost. Then again, in The Tempest my favourite lyric and probably my favourite single lyric from a d&b band is very simplistic: "You must have known the storm was coming when the clouds appeared".
Green Day - Green Day uses lyrics in the most part very well. American Idiot is of course a highlight of this, with the lyrics used to create a story to which the album flows (the rock-opera style). This works well, very well in my opinion. 21st Century Breakdown attempts to create a similar story, but here I feel the lyrics are less meaningful, but still have purpose.
Mumford & Sons and Noah & The Whale - these both use lyrics incredibly well, all with purpose all to express love and emotion as well as create great music. Mumford & Sons I personally believe are the best lyricists of any band currently in the charts. The mix of pure emotion together with poetic lyrics inspired by classic poets, writers and novelists is simply amazing and the words really shine through betwixt the amaizng music. Noah & The Whale are just pure love, and this shines in the songs which match the lyrics.
The Qemists - here is an example of what I think is great music often spoiled by lyrics. The lyrics are stupid, chavvy and tend to go over songs which without them would sound great. A shame, I know, but that's grimey drum & bass for you.
So, in summary, I think it all depends on the genre of music, whether or not the lyrics are sound and give relevant meaning and whether or not they spoil the music which lies beneath them.