There were several. Clay tablets from Ugarit, a Linear B tablet from Pylos, cuneiform tablets from Hattusa (in the decades before the city was abandoned), and several records from Egypt during the reigns of Merneptah and Ramesses III.
Should people stop telling new stories? A century from now the best books of today will be classics. Books can act as a time capsule of a certain time and place and mode of life. And that has value.
You're absolutely right. Though I don't understand why this idea persists - even in academic scholarship. It has been proven decades ago that non-meteoric iron was smelted in the Early Bronze Age. Though the main reason bronze was used for so long appears to be because it was actually cheaper than iron. Smelting iron required the burning of an absurd amount of trees, which was extremely expensive.
No. Iron has been smelted in Anatolia since 2500 BC. It was initially believe that this iron must have been meteoric, but isotonic analysis done in the last few decades has shown that much of this early iron is in fact non-meteoric.
It is absolutely a popularity contest. The biggest problem is that many academics are reluctant to deviate too far from current consensus in fear of damaging their reputation.
The result is that research in many fields tends to stagnate and reinforce old ideas, regardless of whether they are right or wrong.
Ancient tradition unanimously ascribed the authorship of the Iliad and Odyssey to Homer. We know nothing about Homer, except that he likely lived around the area of Smyrna and that he may have been blind.
Butler's theory is nice and all, but I would give significantly more weight to what ancient writers had to say about Homer.