My biggest issues with Karma systems, is that they inevitably make value judgments for you by classing behavior as either good or bad.
I hate this because good and evil are simplistic fairytale notions that have no real connection to anything in the real world.
People aren't evil, they have character flaws that lead to behavior that harms others.
Furthermore, no act is essential to its intention, which means that acts intended to be good, might very well cause harm.
So, if I'm given a choice between taking someone's life, how will that be judged?
In games with karma systems, all such actions must have an arbitrary standard with which to judge the act immediately, in order to assign karma points and that necessarily leads to dumbing down the context of the action.
Let's say I kill a guy, and the guy I killed would, if I hadn't killed him, done something horrible. Shouldn't that mean I get good karma points?
What if I let him live out of goodness of my heart, doesn't that make me good, despite the fact that it had ****ty consequences for somebody else?
All games I've played with karma systems just opt out of that discussion, and therefore they end up with these silly Disneyish good/evil archetypes, and that's something I can't stand.
In my game, the "karma" system is invisible. How you respond to moral dilemmas effect character development, in terms of stats and skills you receive. It also changes some story elements, but you are never told how good or bad you are.
All situations happen in, and are limited to, the specific context you're in at that moment.
It doesn't limit your endings, or make it harder for you to play.
It's a tool that allows the player to express him or herself in different ways and thus relate more closely to the character - not an excuse to fill your game with simplistic characters and roots to different endings.
Real consequential choices have real consequential results - small inconsequential choices don't somehow magically amass into one giant life-altering event.
People who think that read too many fortune cookies and horoscopes.