"it's a bad moral choice, there aren't enough rewards for nuking megaton! you can get all those caps easy in the lategame! if you try to turn burke into the sheriff instead, burke kills him and he drops one of the best assault rifles in the game early!"
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It could have worked but it was jammed into a setting where it just didn't fit. For Dead Space's already established audience, it just meant content that a solo player wouldn't be able to access.