While it's true that class difference and the labor conditions that go along with it have a strong effect on readership, the influence flows in the other direction as well (being able to read = better economic prospects, generally). Your post is polemical and personal, and I object to it being rated "insightful."

Part of the problem is presented by the class characterizations you make; in Europe (the home of the novel), there never really was a strict division between the "idle rich" and "the illiterate." When there were stark class differences like this (perhaps in medieval times), the idle rich were themselves largely illiterate, since mostly it was the monks who could read. In fact, reading publics have historically been underminers of class difference, rather than perpetuators. So there's that.

The other part of the problem is your misunderstanding of the material conditions of book publication and consumption. To stick to one example that runs sharply against what you say: most of the novels published in the 19th century, especially in England and France, were serialized in periodicals, and consumed bit by bit, like "The Sopranos." Serialized novels demand smaller incremental spending from consumers, both in time and in money.

So, while there surely were and are class differences that pervade consumption of all kinds, including intellectual, educational, and entertainment products, talking about it the way you have doesn't really add anything to the discussion -- is not, in fact, "insightful" -- since all it does is induce people to identify with one or another side of a false dichotomy. The future of literature, and reading of all kinds, is central to the future of democracy and justice in the world. Promote that, and serve your fellow humans, instead of defending your own personal preferences for how to spend your time.

Should there be a difference?

Western sensibilities tell us that there is a difference between a combatant and a civilian. Yet no one has told that to the other side.

To first answer your question: YES we must maintain this distinction, as difficult as it may be at times, else we are savages and (importantly) are not doing good. You know the phrase "we had to destroy the village to save it", right?

During WW2 we didn't really care and perhaps that guilted some people.

It didn't just "guilt" some people: it also resulted in the slaughter of millions of innocents, for instance in the firebombing of Japanese and German cities (Tokyo, Kyoto, Dresden, etc.), and of course the atomic bomb.

That is, what is the moral difference between bombing a city and Hitler's Final Solution? That is, they are both military actions against civilian targets with marginal military benefits, and cause horrific suffering. (there clearly is a difference, but I'm suggesting that indiscriminate killing of civilians is not much better than genocide)

In Viet-nam we also didn't respect a civilian/combatant distinction, and what did it get us? 1 million Viet deaths and 50,000 American -- for what?

This points out another problem with indiscriminate killing of civilians: you fail to win the "hearts and minds" of the opponent, and cannot secure a lasting peace. Consider for instance in the US Civil War, Sherman's March to the Sea, when he laid waste to the South, causing awful suffering, humiliating it, and undermining the possibility of Reconstruction.

The problem with separating the two is that in the long run the wars are prolonged and so is the suffering.

This is known as the "war is hell" doctrine: war is so bad that anything that shortens it is worth the cost. This is firstly a cop-out: it denies the need to apply moral decisions to war. Secondly, it is generally in retrospect seen to excuse activities (targetted killing of civilians, rape, pillage) that do not materially affect the success of war.

One of the great lies of the 20th century were systems (like Fascism and Communism) which said: "We must kill millions of innocents to reach the promised land". We have seen where that leads: a hecatomb of corpses and no promised land.

For a far better discussion of these issues (and you certainly seem interested), please read "Just and Unjust Wars", by Michael Walzer, where he discusses the issue of ethics in war in great detail and lucid prose. It's widely recognized as a masterpiece in the area.