The morality system was a huge disappointment for me. You said most of what I wanted to say, so I’ll be brief.
Right near the start of the game, an NPC outlines the Way of the Open Palm vs. the Way of the Closed Fist, more or less the same way you described them. And I was so excited to see a morality system in which both sides were morally defensible positions. But from the very first Closed Fist follower you meet (just minutes later), they may as well all be monacle-wearing moustache-twirlers who punctuate every sentence with “mwah-ha-ha!”
The worst example that I remember is a bootlegger who’s essentially holding a town hostage. Far from following either philosophy as described, he’s just plain evil, and in fact I easily came up with (IMO solid) arguments for actually swapping the game’s morality labels on the player’s options. But no, one option is clearly “evil”, so that’s Closed Palm, while the other is obviously “good”, hence Open Palm.
LSD: Dream Emulator must also rank up there, surely? :)
Gorogoa has been on my “pile of shame” for several years now. Perhaps today’s the day.