The whole point of RP games is to build A character that you can live out in a role, being a total bad ass that is renowned for his deeds would spark my interest so much more than the current 1 character doing multiple stories fresh like some mix tales book.
Wouldn't have to be all that complicated to implement something that tracks your point in the game, in fact it probably already exists in the form of achievement trackers? and then to have some sort of a trigger in npcs to recognize this change in your character and act accordingly- a few more voice recordings on top of this and you're done.
I don't know how hard it would be to be fair but I find it hard to imagine this not existing in a 2011 role playing game- but indeed the lack of it sure ruins the experience for me to some degree which is a damn shame since everything else is just perfect for that medieval RP feel.