Perusing the features this past week at Gamasutra, an article stood out - a student publication that broke down the implementation of "morality" systems into games.
It's easy to criticize morality features in games, and the author puts a deft touch on analysis of the issues with the "Bioware-standard" morality system. Normally, criticism of such systems focuses on the polarization of the divergent moral choices - either you're a saint or you're a demon. That's not an undue criticism, but the author goes beyond this. He mentions that the real problem is that the game forces the player toward poles of morality by tying gameplay mechanics into the morality system. The fact that many players often make mechanically sound choices in a game over narratively sound choices drives this - the same mechanism that drives players to choose optimal stats when configuring a character (over choosing more well-rounded stats) is what is moving this.
The author then goes on to assert that the best method is to divorce the morality system from main-line gameplay; to make it ancillary to the gameplay at most, irrelevant at least. He cites Dragon Age as an example - in that series, morality choices drive small story hooks and relationships with characters around you, but overt stats and story progression are largely untouched (it's not a perfect example, of course).
I think that there's a missed opportunity, though, if these faux-morality systems were gone completely. I think the problem may be that they're supposed to be stand-ins for morality - in that regard, they come up pretty short. There may be other places, though, where they work well. For example - my first experience with this kind of angel/devil "morality" setup was in Knights of the Old Republic, a game which, at the time, seemed revolutionary for its use of bilinear (or at least parallel) narrative. The morality system there was of course the Dark/Light sides of the Force, and even though it was simplistic, it fit stylistically within the context of the game universe.
So what is a designer to do? Can a game work with something like this without saying "this is Morality?" Maybe it can - I don't know of any reason that a game couldn't run parallel systems - one, this dual-phase pseudomorality that reacts to the player's actions, and two, the gameplay-divorced social morality that reacts to players' interactions.