I decided it would be fun to shoot up the prison controlled by the powder gangers. while i was blasting my way through i noticed that i was losing karma for looting. Is there a way to fix this/is this intended? I'm not overly concerned for this playthrough because the karma loss from stealing was offset by the gains from killing powder gangers, but it seems to me that if you're at war with a faction stealing from them shouldn't make you lose karma.

I was thinking the EXACT same thing lastnight. I figured it was something to do with making it so you couldn't "get away" with stealing, but honestly, I think if you're infamous or worse reputation with a faction, "stealing" should no longer be an issue. I think all loot that belongs to that faction should be considered fair game, as it is no longer stealing when you have to fight for it. (as the factions will attack on sight)

As far as I remember you get good Karma for shooting the Powder Gang so maybe it balances out? I dislike this too.

I think it's the fact that you're doing bad things like stealing. Even if they're bad you shouldn't steal.

but if you're killing "enemies", don't their items become "fair game"? I mean, it's not stealing if you loot a raider's shack in Fallout 3.

They should make it so that if the item belongs to a faction that is hostile with you, the item shouldn't count as stealing. or at the very worst, just count as a reputation hit, not karma. This would change if you later became friendly with the faction. Though, they should also make it so that after a certain amount of negative reputation, you pass a point of no return, wherein for the rest of the characters game, that faction will be hostile with them. that way you couldn't just get unfriendly just to get some good loot, then play the "sorry" game and get friendly again like in Fallout 3.