This will only work if there is a enough dialouge/interaction to actually get to know someone and "like" them.
I dont think the moral dilemma would be so great when someone asks you to kill Bob, townbuilder #3 who just says "Greetings, Breton!" every time you pass by.
I think the idea of the radiant story working like this is not to make you "kill someone you like" but rather "interact with someone you've already met".
Think of Daggerfall with its million or so NPCs.. what if, after doing a quest that involves 2 of them, they got more likely to be involved in future quests? That would actually give some of them a sort of story.. a randomized one but still a story.
And then what if each story assigned some kind of flag to the NPC, like: Parinoid, Ruthless, Kind, Inquisitive, Amoral. So perhaps the random NPC that wants you to kill someone will have Ruthless attached to them after that quest, and be more likely to be involved in quests that have a Ruthless role in the future?