A step up from the persuasion minigame, I guess. From a roleplaying perspective, it's not necessarily a bad thing, having the player focus on intent more than choice of words (intimidate, bribe, seduce, disrobe, etc). Can't say I favor it over the traditional conversation trees. The shift from active participant and passive observer becomes more obvious - though, of course, this is more a design issue than it is over what dialogue 'system' is being used. Click 'threat', view scene.
Dialogue trees as they currently are aren't perfect either, though. There's lot of room for improvement, but mainly at a fairly large cost in resources - perhaps at a minimal return in investment, since current design of such trees is already effective enough. In this way, ME's system can provide a fair economy of resources. By limiting the amount of branching, you focus more on the cinematic quality of each branch. Different priorities, perhaps. Hmm.