The abstraction of hitpoints is not that one eats bullets, but that you're experienced in being a difficult target. You don't die in a scratch (which could be construed as something like taking 10 damage from a pool of 100). Of course in first person this (usually, not necessarily always) gets horribly skewed when you see where the bullets land and then you get shit like 32 bullets straight to the face. As for the topic. It really can go both ways. Design depending. But Fallout has had levels, and I think this should remain (in the imaginary situation where there still was a new game in the series worth playing).