"Consider some uncontroversial facts about the semantics of fiction (Walton, 1973, 1978; Lewis, 1978; Howell, 1979). A novel tells a story, but not a true story, except by accident. In spite of our knowledge or assumption that the story told is not true, we can, and do, speak of what is true in the story. 'We can truly say that Sherlock Holmes lived in Baker Street and that he liked to show off his mental powers. We cannot truly say that he was a devoted family man, or that he worked in close cooperation with the police' (Lewis, 1978). What is true in the story is much, much more than what is explicitly asserted in the text. It is true that there are no jet planes in Holmes's London (though this is not asserted explicitly or even logically in the text), but also true that there are piano tuners (though--as best as I recall--none is mentioned, or, again, logically implied). In addition to what is true and false in the story, there is a large indeterminate area: while it is true that Holmes and Watson took the 11:10 from Waterloo Station to Aldershot one summer's day, it is neither true nor false that that day was a Wednesday ("The Crooked Man").
"There are delicious philosophical problems about how to say (strictly) all the things we unperplexedly want to say when we talk about fiction, but these will not concern us. Perhaps some people are deeply perplexed about the metaphysical status of fictional people and objects, but not I. In my cheerful optimism I don't suppose there is any deep philosophical problem about the way we should respond, ontologically, to the results of fiction; fiction is fiction; there is no Sherlock Holmes" (Daniel Dennett, 1991).
That was all background so that you will understand me when I want to say that while I agree that Sherlock Holmes does not currently exist [and so far has never existed], the Sherlock Holmes we all somehow know, whose identity is spread out in stories and in readers minds, could become an entity proper.
For a moment, think about what a person, what a personality, what a character is. According to Douglas Hofstadter, a person is a pattern. More than a physical body and brain, a person is a great deal of information arranged in a particular way. The code includes their hair color, how they react to spiders, their tastes and preferences, their memories. This is why it is possible to say true things about characters who do not physically exist [let's call them 'virtual people'], whether they are fictional or simply dead.
It's also why virtual people are more real than you might think at first. The information you've gathered about them, the parts of the pattern they've shared with you or that you have observed, can be recreated in your own mind. They can become part of the pattern that makes up you, but they can also be said to exist, if incompletely, in their own right. Which brings me to Sherlock Holmes.
The British detective has never had a material body, but almost everyone, including Dennett, agrees that he has a recognizable and distinct character, personality, pattern. He exists incompletely in the minds of thousands of readers. They can say definite things about the way he looks and thinks, and predict his reactions to certain scenarios. Many readers have read enough stories that they have a good sample of the contents of his memory cache as well.
What if one of the most informed readers, or what if Conan Doyle himself, in a few years when the technology is good enough and computers are conscious, programmed a machine to be Sherlock Holmes? Possessing his own medium for his pattern at last, and with capacity to develop and change that pattern, Sherlock, a fictional character, would exist more fully than your deceased grandmother does, he might be just as real as you are this minute.