How the fuck did we as a society get the idea that these two mediums are incapable of producing art? Was it the sixties? Was it all the LSD?
Quite the opposite -- that's about the point where people started RECOGNIZING comics as art.
I just finished reading a book called The Ten-Cent Plague, which I'll probably expound on a bit more later, but the gist is that the sentiment against comics was originally racist and classist -- when the medium first appeared at the turn of the twentieth century, it was essentially entertainment for illiterate immigrants. In the decades that followed, comics became accepted, on up through the early 1940's where they gained mainstream popularity. In the 1950's, however, they became the first flashpoint in the culture war (before Elvis), as a medium that targeted social outcasts and disrespected authority and "traditional values".
Which is, of course, exactly why the anti-establishment hippies of the 1960's found them appealing.
(Which is rather ironic in the case of, say, Doctor Strange, a favorite among the acid set which was created by Steve Ditko, who despite his psychedelic style is a right-wing reactionary and who is in fact the basis for Rorschach.)
It's as if Time included it because they liked that on the surface it seemed to be agreeing with them that graphic novels are not real books.
Not exactly. "Graphic novel" is a term people use to differentiate between things like Watchmen and things like Spider-Man, as if there's some important distinction there, as if one is art and the other is schlock. Graphic novels are for adults, comics are for kids, or adults with brain damage.
The original distinction between a comic book and a graphic novel, of course, was simply one of format: comics are serialized, include ads, generally run about 24 pages, and are stapled, while graphic novels are bound and of an indeterminate length and format.
Of course, the problem is that by that definition, Watchmen is a goddamn comic book, because it WAS originally printed in serial, 24-page format with ads and staples.