I like this idea a lot. I especially like the idea of choices having unintended results that aren't immediately apparent. They don't all have to be drastic "do you kill this person to save these 5 others". We, in our every day lives are confronted by choices that seem to lack an obvious answer all the time - our jobs, friends, love lives. The archaic choice between do you pick the right option or do you act like a sociopath should be replaced by here are some options...we have no idea which one is right, but you can choose one (or in some situations, not, and see what happens). I also think that karma points don't make sense. If I see a city is falling apart and I support a dictator to put it together, do I get positive or negative points? If I decide to fight against the dictator, and keep the city free from her, but leave it open to disorder and famine?
Didn't Wasteland have a part where a rabid dog was attacking you, but it was also some kid's pet?
Anyway, love the idea, can't wait to see how it's implemented.