I think the best example to date of a game appealing to your morality as far as killing NPCs is Metal Gear Solid 2. Personally, it's my favorite game of all time because it is the first of it's kind to incorporate so many innovative ideas.
When you sneak up on a guard and put a gun to his head, he will put his hands up. You can then walk around to the front and aim at his head, heart, or crotch and see him start to tremble and beg for his life, even giving you items to apease you. If you do decide to kill him, there is an extremely realistic amount blood and gore, including if you hit him in certain places like the neck you can see it spurt out and stick to the walls. This being said, the game encourages you to subdue guards and avoid them altogether rather than get in situations such as this.
Anyway, that's basically what your all talking about, and it's already been done in one of the bestselling games ever (I think).
When you sneak up on a guard and put a gun to his head, he will put his hands up. You can then walk around to the front and aim at his head, heart, or crotch and see him start to tremble and beg for his life, even giving you items to apease you. If you do decide to kill him, there is an extremely realistic amount blood and gore, including if you hit him in certain places like the neck you can see it spurt out and stick to the walls. This being said, the game encourages you to subdue guards and avoid them altogether rather than get in situations such as this.
Anyway, that's basically what your all talking about, and it's already been done in one of the bestselling games ever (I think).