1) Let's allow the Bible to speak for itself, ok? The Bible is explicitly clear about when Jesus was speaking in parables. Over and over many times in Matthew 13 alone it is careful to tell us when he was giving a parable, but it doesn't do so in Luke 16. If you choose to believe the rich man and Lazarus was a parable, you do so, not because Luke 16 says so, but for your own theological reasons. Jesus said "There was a certain rich man," (Luke 16:19) so I have to believe the man existed or Jesus was wrong. He was no more speaking in parables in verse 19 then he was just one verse earlier in verse 18. Surely you don't think what Jesus said here about adultery was a parable, do you?
2) Names are never mentioned in the parables of Jesus. This is one consistent characteristic of his parables. Rather it be the ten virgins, the sower, the mustard see, the Good Samaritan, or any of the others, no names are mentioned in such parables. If a character is fictitious, its not necessary to give him a name, is it? But in Luke 16 names are mentioned: Abraham and Lazarus, real people. Abraham for sure, the Jews knew.
3) Jesus parables are true to life, meaning, they are based on reality, on things that actually happen. Jesus used things his disciples were familiar with to coin his parables. So he spoke about the shepherd who leaves 99 sheep to look for the lost one because there were shepherds in Israel who knew about this; he spoke about a Good Samaritan because Samaritans were real, and some did have faith like the woman at the well in John 4; he spoke about fishing because many of his disciples were fishermen. All his parables about marriage feasts, leaven fermenting flour and so forth were based on everyday things in Jewish custom. So even if the rich man and Lazarus were a parable, it still was based on something real. Take for example the Good Samaritan:
There really was a road from Jerusalem to Jericho, and that that road really was frequented by robbers. It is a historical fact, you can check this out, that the Romans built a garrison on that road to protect travelers from bandits. Jews were real, so were Samaritans, even the currency, the dinarius was real. So Jesus was no myth maker. He didn't preach fables like Alice in Wonderland. He spoke about real people and places and things. So even if Luke 16:19-31 is a parable, it is still based on something real, therefore, hell is a real place, the fire is real, and these were two real people.
The Greek word for parable is paraboli, and this ame word is translated as "allegory" (KJV) in Galatians 4:24. In this passage (Galatians 4:22-31) we are told that the relationship between Abraham, his two wives, and their sons, as well as the sending away of the one who was slave, was a paraboli, a parable; but no Christian would dare argue that the events mentioned here didn't happen. The Book of Genesis records that Ishmael did persecute Isaac, and Sarah did have her husband send Hagar and her son Ishmael away, and it does record that these were all real people. So parables were based on real life events that used to happen.
4) If hellfire isn't real, then its a false, pagan doctrine. In that case, we are to reach the ridiculous conclusion that Jesus borrowed a false doctrine and used this false doctrine to teach his disciples. Could you imagine Jesus coining an illustration in the Bible that involved mythical gods like Osiris, Anubis, Thor, or Posidon? Could you imagine Jesus putting a false doctrine in the mouth of Abraham, to make him preach about an afterlife and a place of torment that didn't exist? Why would the Son of God have to go to such lengths just to get over a moral point to his disciples?
5) Surely if this were a parable, Jesus would have explained it, or at least the disciples would have asked for an explanation as it was unlike any other parable they had heard before. The parable of the sower is explained by Jesus himself in the Bible, why would he leave us to guess and make assumptions about the meaning of this passage if it was all symbolic?
I can think of other reasons why this is literal, but why do you think it CANNOT be taken literally? Why?