I've heard the following verse before in a couple of spiritual discourses but more recently found it in The Cultural Heritage of India Volume II - Itihāsas, Purāṇas, Dharma and Other Śāstras in written form.
Who says this verse and in what context? I'm assuming it's Vyāsa but I could be wrong.
THE CHARACTER OF THE MAHĀBHĀRATA
Matthew Arnold, defining the epic form of poetry, said that the main story must relate to high personages and that its language and metre should be simple and dignified. It should contain vigorous dialogues. It should have interludes in the form of episodes. It must have a high and noble purpose. In the light of this definition, we can surely call the Mahābhārata an epic par excellence. The story relates to high personages belonging to the hallowed race of the Bharatas of high antiquity. The metres employed in the epic are simple, being mostly anuṣṭubh and triṣṭubh and the language used is simple, sonorous, and dignified. There are a number of racy dialogues here and there, and a large number of episodes. The moral objective Of the work is propagation of the Eternal Law, covering the four human values — dharma, artha, kāma, and mokṣa. Of these, the first is to be regarded as the most valuable treasure.
In fact, the note of dharma permeates the entire poem, and is concisely expressed in the famous couplet:
Ūrdhvabāhur-viraumyeṣa na ca kaścit śṛṇoti mām,
Dharmād arthaśca kāmaśca sa dharmaḥ kiṃ na sevyate?
The introductory chapter of the epic narrates in detail several other objectives — one of which is being an eternal source of inspiration to future poets; but dharma is the supreme teaching of this epic, and so it is rightly regarded as the fifth Veda.