To be honest, this sounds worse than it is. As I mentioned, unless it is a regular quest-giver or merchant, you don't generally speak many times with an NPC in RPGs (and half of those also stop talking to you and start answering with one-liners, no matter what dialogue system the game uses).
The real problems with dialogue wheel are, IMO, these ones:
- modders are now limited to less dialogue options. Now, PC gamers will no doubt get mods that alter the UI to old fashioned selection, but console players will get stuck with what they have
- you don't get the flavor of saying something the way you want to say it. What the Voice-actor says, you hear
- it has only four options. If you HAVE to put in the Dialogue Wheel, why not do it like Mass Effect which has six?
- it might be hard to know what your character will say (my most common problem with dialogue wheels). Mods might fix it by replacing the one word with a sentence that your protag will say though
- not related to the dialogue wheel, but the voiced protag: this will be a large punch in the guts for quest mods. We got around voices NPcs by volunteer Voice Actors from he community, but how can you make up for the voiced protag?
All in all, I think that the Dialogue mods will be the first and the most popular mods for PC gamers.