It's a cop out. They have the main character be a good hero that went to kill the previous overlord. The overlord erased your memory and made you think you were him.

Isn't that the plot to the latest MGS?

The latest MGS' ending was kind of a letdown because you weren't playing the character you thought you were, AND you learned that neither character was a villiain despite you killing one in the first NES metal gear game.

The game ends with the character you thought you were playing basically telling you that you're not who you thought you were, and your new objective is to fake being big boss/evil so big boss can create a new country without being scrutinized to realize the bosses vision

... As convoluted as metal gear games are, It was probably the most fun I've had playing a game in the past 5 years.

but if you succeed at a theft, the only repercussions would be negative relations with your victims. the next time you encountered them, the slightest provocation would make them hostile, but that would be it.

I don't know. I think if you REALLY pulled off a successful theft it would make no difference to their relations, but they would comment about how things were being stolen. The thefts may impact their behavior....

If you successfully steal from a merchant maybe they complain that due to recent thefts they haven't been able to stock excellent goods, and fewer wares or worse products are available for purchase. Even better, in a somewhat cruel twist, the NPC could tell the player he was trying to buy {epic item} but due to thefts he can now only sell {sub-par item}; if the player is willing to help make a donation of {10x cost of stolen items} he could perhaps start to recover his business.

Perhaps if the NPCs thought you were good they could petition you to help catch the thief. In a game set in a high-tech world I can imagine showing the player a blurry snapshot of the player committing the theft, but the shot is taken from an awkward security-camera view and didn't see their face, then tell the player there is a reward out for catching the thief. I can see that leading to tons of fun brainstorming ideas.

Thinking more on it, imagine if Link returns to Kakariko Village had villagers complain about how their bee-bottles were stolen, or how they kept collecting hearts in jars but someone kept sneaking in and taking them. If Link never plunders during the game then Kakariko Village ends the game rich, if he plunders a moderate or heavy amount the village is poor and the epilogue talks about the sudden spike of burglaries, vandalism, chopped-down shrubs, and broken pottery has ended... but so had the kindness of randomly mowed lawns.