The rules as written work perfectly well. The point you never seem to touch on at all is a bit of GM responsibility in this whole process. The whole argument you've been making predicates on the concept that the GM is not putting their group into situations where they have to make these difficult choices. But if the Morality system is so key to the whole experience of F&D as you say, and I am not saying it is or is not, then the GM should also be making this system a big part of their game session planning. Present the players with situations that play off their strengths and weaknesses, give them difficult choices where they either have to take a harder route or they have to perform an action that will lead to conflict.
If the GM is not incorporating the system into their sessions then 1) You are only half using the system. 2) Perhaps the GM is saying they don't feel it is such an important, integral part of their game.