That way as a hero your survivability goes up whereas bandits can get more effective weapons. Of course there would be more bandits than hero’s, just because of the nature of this game, but you could always balance that out by giving hero’s the best meds and armor, and giving the bandits the best guns and ammo. That way you can still have a sort of group v group dynamic, because if you try to turn on your guys or just kill everything in sight, you’ll lose your level and be locked out of the top tier gear. You gain good karma by killing bandits or healing players, and you get bad karma by killing hero’s or neutral players. I think a karma system similar to what we say in the DayZ mods would be a good way to implement karma in this game, where instead of having Bears and USECs we have hero’s and bandits, with karma specific traders that sell you better stuff as you increase (or decrease) your karma.