It was determined by your good or evil actions though, regardless of whether they were witnessed by anyone who survived. It was a gauge of how the character was played. As it should be, and seems to be in FO3.
Yes, but that was probably more a case of technical limitations and time constraints of not being able to implement the variable of whether you were seen or not properly. In Fallout 3, they took a flawed implementation of a mechanic that measures how respected you are (see the very description) and turned it into a mechanic that measures whether you are "objectively" good or evil. As it shouldn't be.