Allah Almighty says to the Prophet (sws) that he will also leave this world as the previous prophets did. A ḥadīth is very commonly known that Prophet said a Muslim must visit his grave to say asslamaulaikum when he comes for Haj or umrah. If this narrative is authentic, then don't you think it is in contradiction of the verse I have referred to above?
Secondly a firqah amongst Muslim strongly believes in intercession through awliya Allah who are dead and probably their argument is based on what I have written above. I may clarify here that I am not interested in going into any sort of argument with believers in intercession, just want to know the truth:
(1) saying assalamu alaikum to the Prophet (sws) which he listens and
(2) on what basis we can connect the similar listening of assalamu alaikum by awliya Allah?
The salutation we make to the Prophet (sws) and also to any dead lying in grave is not taken literally. When we visit the graves we address the dead. This does not mean that they listen to us. These are only our good feelings and our prayers for them. Salam and greeting is in fact a sort of prayer. If accepted it can benefit the dead in their afterlife.
As for the belief of those who claim that the Prophet (sws) is alive or the saints are alive and listen to us and intercede with God on our behalf it is alien to Islam. For detail please refer to: http://www.al-mawrid.org/pages/questions_english_detail.php?qid=110&cid=51 and http://www.al-mawrid.org/pages/questions_english_detail.php?qid=1156&cid=515&search=alien