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When we say "literal" we are referring to something other than "figurative" usages and symbolism, so we have a bit of a contradiction here.
"Literal" refers to the denotative meaning of language. "Figurative", as a term, refers to the counterpart of "literal" language. Symbolism, metaphor, and figures of speech all qualify as "figurative".
The question being asked here seems to side literal meaning with figurative meaning against some greater or more figurative meaning of the Valley of Ashes... Without knowing what this more figurative meaning might be that we are drawing a comparison to, we have to stick to a basic symbolic interpretation. This will not be a literal interpretation as a literal interpretation would simply be a discussion of what this place looks like - desolate, populated by over-sized advertisements, home to the poor, etc.
With that said, we can take a look at what the Valley of Ashes might signify figuratively.
This place exists between the city - where money is made and parties are held - and the suburbs or opulent neighborhoods of the wealthy. This is where more parties are held, where affairs are sparked, and where the drama of private life often takes form quietly. In the Valley of Ashes, people pass through. Car accidents happen. George Wilson loses his wife, first to a lover and then to death.
This is a lost place. This is where people lose themselves and others. Daisy loses her chance at happiness here when she runs down Myrtle in a car. Myrtle loses her life. This is a place where despair seems to reign unchallenged.
The Valley of Ashes is a wasteland. It is created by the places between which it sits. A by-product of materialism, the Valley of Ashes stands as the opposite to the gleam and glitter of the city and its material wealth.
The valley of ashes represents the moral and social decay of the society from unpursuit of wealth as the rich care about themselves. It also represents the poor, like George Wilson who is in the lower class of society.
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