Besides being macabre, I think the holocaust example is a bad one because there is no positive outcome. When throwing someone off a bridge, there is a clear positive outcome, lives are saved, at the expense of one innocent dead. Thus the moral dilemma is if this is acceptable to you or not, do you act or not. That's what makes the first example merely sadism, not a dilemma -- your choice is irrelevant, everybody except one person will die and the possible benefits of this choice or the other are purely speculative. Sadism = bad, the player loses because the game is preprogrammed to make him lose. Instant uninstall <img src="/ubbthreads/images/graemlins/winkwink.gif" alt="" /> Dilemma = good, if the sh*t hits the fan it's because the player made a choice and now has to stick with it, and perhaps next time not go for the obvious win. Every possible choice must bring Good at the cost of some Bad, then we can fret over which one has the best net gain. It's sadism when all the options have Bad, but no Good.
On the other hand, if done right it can also be interesting to add a sense of Fate to the game. When you make a choice that doesn't look like a choice, but it turns out to have consequences much later in the game, that's good for replayability. Not the greatest example, but suppose you can only carry one of two objects, eg the sum is too heavy. Both of them seem rather "eh" at the moment, so you just go with whatever looks nicest to you, or whatever. Then 20 hours of gameplay later, it turns out that object A allows you to heal some terminally ill important dude, but object B, and only object B, allows you to rid a village of a child eating monster. But the line between this and "you're screwed regardless, just because the developers are a bunch of *ss hats" is thin <img src="/ubbthreads/images/graemlins/tongue.gif" alt="" />
