Personally i would just strip out good/evil choices from dialogs and have it all be action and reputation based, (Treat someone badly and his friends/faction will like you less), in a sandbox RPG you could then have reputation spread as npcs interact with eachother and you could track multiple values per npc. (a NPC might for example consider you to be a good guy to have around in a fight while he wouldn't let you enter his home unsupervised since valuable items often "go missing" when you're around)
I agree, This is the better way of doing it imho instead of getting a global evil or good reputation.
But you still have evil&good choices even with this system because otherwise you can't get negative reputation unless it's with the bad guys you get negative reputation.
It can be really "simple choice" like you're walking a corridor in perhaps an inn and you bump into someone and then thers the choices like..
1. Excuse me, I'll step aside.
2. Get outta my way.
3. *push him out of the way*
4. *move aside and then stick your leg out so he trips over it*
You could make it even more evil if the person that you bump into is a handicapped person or an old lady with a cane lol.
And you can imagine yourself how you could keep building on what happens next after each of those choices.
Maybe the person is an important npc.. or an important npc that will have a big impact on your game later on... and will remember you.