Lately, I've been playing Fallout 3. Reasonably fun, for the most part, but it does have a mechanism called "Karma", which is essentially a measure of how "good" you've been by the game's standards. Sadly, this is a one-dimensional line. You can completely wipe out the effects of, for instance, blowing up an entire town, by repeatedly giving water to certain NPCs. It's also rather broken; I've had clearly "evil" characters attack me, and once I've done the game world a favour by removing them, been reprimanded by the karma system for taking their belongings. They're not using it any more, they were evil, I was told I was being good for killing them, but taking their stuff is bad, wrong, and evil. This seems distinctly broken, as does the entire concept; it essentially boils down to a count of puppies kicked versus kittens cuddled.
Such systems in games seem to be universally unpopular. They're generally heavy-handed. The least terrible version I'm aware of is in the Mass Effect series of games, which I've not actually played myself, but their morality meter is actually a two-axis job; it has scales for both "paragon", which is idealist (with a side order of "spineless wimp") and "renegade", which is pragmatic (with a side order of jerk-for-the-sake-of-being-a-jerk), and the two are essentially independent of one another. Unfortunately, the second game does some heavy-handed behaviour modification by means of altering your appearance based on how you've acted, and I dislike that. What I'd like is for each NPC to have their own preferences for "how people should act", and to react to the player character based on what actions of yours they're aware of (which requires a change in how such things are handled; currently, there's rarely if ever any restriction on what player actions an NPC can know of) and how well those actions line up with their concept of correct behaviour. Make it somewhat mor complex than the above-mentioned puppy/kitten count.
Of course, that's an unattainable pipe dream, and I doubt such a game would sell well, but I'd quite frankly rather have no morality meter than such a simple-minded one.