Needless to say, so few letters is not enough for decent dialog, hence it's probably one of the reasons we got such stunning insights as "[Intelligence]You fight the good fight with music?" and the like. It also made modding involved dialog more difficult. Though, IIRC, it was possible to mod the limitation upwards.
So my question is thus: has NV raised and/or waived the character limit as part of its improved dialog structure and editor? Because nothing but simplistic one line responses are a drag, especially in a Fallout game.