Most of my issues with the Paragon/Renegade system center on its role as a gameplay mechanic. The P/R system is an evolution of the Persuasion system with one notable difference: it can't fail. This right away removes the risk of selecting Paragon/Renegade options if they are available to you. It makes those options automatically the best options. Choosing grey options becomes a fail-state because the player knows they had a better option available. Even worse, there are often times when choosing the P/R option vaults the player above the moral dilemma that the game has just spent building up. An excellent example is Tali's loyalty mission in ME2. The core tension for the player in that mission becomes exposing Tali's father and destroying her emotionally, or covering up the truth and letting her be exiled. This is compelling because it presents two paths that each have obvious benefits and drawbacks. The P/R options let you cover up the crime while also keeping Tali with her people, which undermines the point of having a dialogue wheel there in the first place.
So due to P/R options always being better, we're limited to - at most - two ways to resolve a dilemma. But for several reasons, there's actually only one for a given playthrough:
1. Because of the points system, until Mass Effect 3 you were only ever going to have either the P or R persuasion option available to you. Since the Reputation system resolved this issue in ME3 I don't consider it a problem anymore. However, there is a deeper problem...
2. Because players are always rewarded for choosing Persuasion options with good consequences, most choices in Mass Effect boil down to the morality of the action itself, and not the consequences. Accordingly, Paragon choices are superior because they involve noble actions, such as forgiveness and diplomacy, instead of ruthlessness, which doesn't make sense unless it's necessary. Once it becomes obvious that the Renegade path isn't necessary, it forfeits the primary reason for going that path in the first place.
Can the system be salvaged for ME4? Sure, and it centers around one simple concept:
P/R options shouldn't automatically be the best choice for any situation. Moreover, the game should promote mixing and matching choices based on the situation. If the game presents to you a situation where diplomacy obviously isn't an option, but you pick the Paragon choice that attempts negotation, it should fail and result in a worse state than if you had picked a different option. Additionally, P/R should not be seen as override commands that are better than grey options. They should not be a better version of the corresponding up-right down-right grey option. Make them distinct and part of role-playing.