I've always argued in RPGs you're playing a character, not yourself. In FPS games the point is you save the world with your reflexes, in RPGs it's your character. It's why I prefer Morrowind to Oblivion: Stats are more important in Morrowind. You are just playing a character, an actor in the game's stage.
An idea I had was your morality could actually eliminate decisions. You could try to do the good thing, it's roll against your morality and if you failed the roll you're character would "override" this and do the wrong thing. Likewise a high morality means your character may actually refuse to do horrific acts.
"Father: Please, help me against the bandits and save my children!"
"Bandit Leader: No, join me in slaughtering the children and I will pay you well!"
"Player: [Attempts to say] I will help you, poor sir!"
[Rolls against player's low morality score of 1. Player is an uncaring psychopath so odds are low. Roll fails.]
"Player: Actually I'll just kill all of you..."
"Father: Noooo!"
"Bandit leader: Oooh, this is getting interesting. Kill them both."
"Father: Please, help me against the bandits and save my children!"
"Bandit Leader: No, join me in slaughtering the children and I will pay you well!"
"Player: [Attempts to say] I value money more than lives, your children must die!"
[Rolls against player's high morality score of 8. Player is willing to kill but only in self-defence. Roll fails.]
"Player: I'm sorry, I can't let you hurt these children!"
"Father: Thank you!"
"Bandit leader: Fool. Kill him."
"Father: Please, help me against the bandits and save my children!"
"Bandit Leader: No, join me in slaughtering the children and I will pay you well!"
"Player: [Attempts to say] I value money more than lives, your children must die!"
[Player has a morality of 3, they are willing to kill and do horrific things for personal gain but not completely psychotic. No roll needed]
"Father: Noo!"
"Bandit leader: Smart man."
Perhaps the game would need some kind of "dark passanger"-esque element (yes, i've been reading Darkly Dreaming Dexter), like the beast in Vampire, to explain this but I think it'd be an interesting avenue to explore. Basically players can start off in darkness, or guide themselves into a slide into the abyss, but can't plunge with ease and redemption is likewise difficult.