Morality systems in games are a new fad, and for the most part are frantically and badly implemented, for example Infamous or SWToR. Despite some of them being good games, the morality systems are usually one of the weaker aspects. The problem is that they make the childish assumtion that people are either good or evil. So bonus points for saving babies and puppies and evil points for wiping out people groups before breakfast. Even one of the most evil people in history wasn't that one dimensional. From a consequentialist point, what Hitler did is the same as killing random people in video games but actually he rationalised it to himself: he thought he was doing good. Anyone who knows they do evil is a psychopath, im fairly sure thats the definition. Added to this, you either have to be all good or all bad, you have to be either mother teresa or peter sutcliffe to get the fancy lightning or red lightsabre. I'm not a crazy conservative but that can't be encouraging good behaviour, most of all it really lets down the games' better aspects as it's shallow.
If I had my way (begins dreaming...) then I would overhaul the system. Completely get rid of the good-bad system, theres no need for such generalisations. Instead have several dimensions to a character, each with positive and negative directions. For example, generosity, all the way negative would be tight and all the way positive would be santa. Also it wouldn't just be determined by random gifts of kindness, perhaps a companion is dying and you give him food. Although not giving food to beggars wouldn't paint you as satans brother either. This would just be one dimension, others could be patient-short tempered, forgiving-unmerciful or strong-weak sense of right and wrong. This could then affect the way NPCs interacted with you, perhaps if you were seen as a pushover, characters would walk all over you or if the other extreme they may not confide in you useful facts. With this, players would be encouraged to engage strongly with issues of right and wrong, when is it right to lose your rag and when is it right to be calm.
Furthermore, the system could be on multiple levels. Firstly each mainish character would have an opinion of you based on all these characteristics, secondly each people group would have an opinion of you and lastly your worldwide legacy. Each of these added together for each character would make an interesting and complex world. After all in real life some people thing I'm a dick and others think I'm a saint. Different people and groups of people have had different experiences of me.
Finally, all that would be required is for lots of options during speech and lots of ethical moral dilemas. This would allow this complex and varied opinion of your character to be buit up. If games ever want to be considered as art, they must break away from the good-evil dimension and start modelling relationships as the complex things they are.