A couple of days ago, HN was asked, "Why did literate programming not catch on?" Predictably, answers ranged from "Because it's useless for real requirements" to "What do you mean? We use it all the time by policy." But a rough synthesis of the overall sense of the meeting, as it were, led me to consider that literate programming requires contemplation. And sometimes you just don't have the time, or sufficient knowledge, to contemplate.
In the typical startup environment, code is written quickly to address specific needs, and as the business pivots and refines, it mutates quickly. So many of the responses addressed that: literate styles don't react well to code churn, and you end up with a literate explanation of code that no longer matches the code (which is of course always the objection to documentation of any kind).
Reading actual code to determine its purpose is effectively reverse engineering. Sure, well-written code should be readable and so it feels odd to call that reverse engineering - but so much real-world code is unreadable that I think it's a good default attitude.
Ultimately, the exegetical stance of integrating literate programming with reverse engineering should support a pretty good overall software development style: quick prototypes to sound out a new task, followed by contemplation of lessons learned and a literate presentation of useful tooling. That's the goal.