I can see that, but a lot of the third-person lines also involve actions or gestures, rather than just being *tell such and such*.
Is there room for improvement? Always. Does that make the current system a mistake? I disagree.
We can definitely agree on the asterisks though, they look genuinely jarring. That's been bothering me as well, more than the system itself.
They can include narration of actions and gestures and still have (perish the thought)
actual writing for what a character will say.
When I play a CRPG, I don't want to have to write my own dialogue. As a writer, I play games to ESCAPE that responsibility.
I absolutely understand and empathize with "well this line is a little out-of-character." But the solution of offloading the responsibility of crafting the line onto the player actually creates a bigger problem, which is that the game no longer has any way to react to the specific tone or language employed. With actual written lines, the responses are able to take those lines into account to create a more natural flow of conversation.
I think I'd be okay writing my own lines if I could type them in and have the other party to the conversation react in a reasonable manner to the specific thing I've written, but that level of dynamic interaction would require science-fiction level AI. Without that, the ability to "imagine whatever I want my character to say" has one slight benefit (nothing I say will be out-of-character) and a HUGE cost (nothing I say will matter).