Unless this, erase level-scaling.
Indeed. I agree that the fame/infamy system needs to have more of an impact on the world than it did in Oblivion. If I have a lot of fame (ie "Champion of Skyrim"), commoners should rally around me cheering. If I'm a mass murder, wanted posters should be plastered everywhere, and Imperial Guards should rally to trap or ambush me. The more change and interaction with the fame/infamy meter, the better.
But definitely that's also an interesting way to use minimum level scaling as an NPC awareness system of sorts. The armor and weapons one holds should also be an indication to an NPC that this isn't a guy to mess with.