"Genre fiction" as a term isn't toxic the way that ethnic epithets are toxic. What I mean is that if a lit-fic author says in a haughty tone, "You write genre fiction; I write real fiction," that's going to be read as an insult, whereas if the genre-fiction writer says, "I write genre fiction, not that boring literary fiction," then the term isn't an insult. In that case it's more trying to treat the term "literary fiction" as the insult.