Genre Schmenre

I've never been good at figuring out precisely what genres I write. In fact, when a professor asked me what kind of stories I write, I took a moment and replied, "Anything that could never happen in real life."

Of course, that mostly puts me in science fiction and fantasy, but now there are so many subgenres of those that I still don't know where I fit. Steampunk is more of a cosy niche, but those I label with that genre can be questionable because most of them really aren't that "punk." Macbay, of course, would have to count because he goes against the government basically his whole life and for the whole story, but Mount? I think it only follows the steampunk aesthetic without really being a steampunk story. So what on earth does that make it?

Then there are the handful of story ideas that don't even fall into one of those broader categories. Generally, I'll label them horror because, being myself, I usually end up killing or otherwise harming everyone. But is that really what constitutes a horror novel? What about thriller? Where's the line? Four Walls is trying to be literary—can that even work hand-in-hand with the horror genre? Or is it horror at all?

And what difference does it really make? I'll judge a book by its cover and synopsis before I ever see what genre it's assigned, but I suppose those in turn are based on the genre. But what if it's more of a general feel of the book? Is that or genre more important? And how does genre affect audiences on ebook sites, like Smashwords, where I'll be publishing? If I label my books incorrectly, will those interested not be able to find it? How specific a genre/subgenre does the average reader prefer?

Basically, genres confuse me, but they're necessary. Do tell me about them, if you like.