I think Tycho from Penny Arcade's problems with the game are similar to yours. Feedback for your gameplay choices isn't immediate. Like you said, you either get by or you don't. And really, you're a superhero in this game. It can be shockingly easy at times. I think the important question here though is to ask "shockingly easy to do what?" If you're trying to get from point A to point B it doesn't take long at all, and if you use all the resources available to you it isn't exactly challenging. [even less challenging with all the UI stuff on]
This is where the player's self-direction and expression come in. There's an obvious incentive for not killing people - less chaos. Death begets death in this game, and there are definitely consequences for your actions. Those consequences manifest in the world and plot. Knowing you're responsible for all this, and especially if you buy into the story, your gameplay decisions do take on weight. Then you set your own goals, knowing how they might affect the world. Difficulty comes in meeting those goals, and improvising (while staying true to your goals/principles) when things go tits up.
I can see not buying into the story and game world, though I do enjoy them myself. I think giving the player so much power means leaning on the richness of the story world and relying on the player to have a stake in it.
If the character interactions weren't static, as in if quests and requests arose from your interacting with characters instead of them just telling you what to do, I wonder if this problem would be solved for you.