Why has post-modernism proven to be popular in literature departments but not in philosophy? As (I think) Joshs implies, 'postmodernism' is more of a pointless buzzword than a useful organising category that groups together thinkers with disparate ideas. The term seems to include everything from scepticism about conceptual categories (Derrida, Foucault -- though again I think these guys only go so far as to say assigning truth or falsehood to statements depends as much on how we construct statements about the world as much as whether those statements really 'correspond' with reality. This is not tantamount to absolute relativism.) to essentialism about conceptual categories (as in the dodgier side of identity politics). It's become even more useless as a term ever since Lord Lobster Daddy became popular with his pOsTmOdErN nEoMaRxIsM conspiracy theory.
Some of these people use obscurantist language (Baudrillard), some of them don't (Foucault, despite his giant sentences, is not that bad). The worst 'postmodernists' do tend towards absolute relativism. But this shouldn't be an excuse to dismiss the great range of thinkers who are shunted under the 'postmodern' label, which is basically what happens when one says postmodernism per se is bad writing and absolute relativism.
In response to the thread title: 'postmodern' thinking (by which I mean a hodgepodge of poststructuralist linguistics, 'continental' philosophy, Marxism (Frankfurt School, structuralist, and more orthodox variants), cultural studies, postcolonial studies, and so on) has become big in English Literature departments as a reaction against what was dominant before, which was even worse than the current so-called 'postmodern' paradigm. Before texts were treated as autonomous, self-referential objects which had little relation to the mechanics of society. At least under the current paradigm academics think about texts as things whose meanings are dependent upon social factors.
Personally I do think the current paradigm could do with a lot more scientific method, and I think the future of English literature probably lies in machine learning/computational linguistics combined with social systems/complex systems theory. But there is much of value to be mined from so-called 'postmodernism'.