Maybe I'm not understanding where you're coming from, but the only problem I see when this idea is applied on computer RPGs is that imagination is not what a computer RPG should be about. I can imagine whatever situation I want when I play a CRPG, but this is pointless, as the game can't react to it. It can only react to what it has been programmed to react. And that is something where the Sims fails, establishing a relationship of that kind. I can imagine multiple situations, moments, lines of dialogue and every detail of their lives, hundreds of entire biographies for every character imagined and gradually updated mentally as their life cycle passes by - but it simply doesn't matter. It doesn't contribute to the game, nor does it register. In the end, you're still left with the only tangible thing that existed before, gameplay. If a game is trying to have me establish imagined relationships between players and NPCs (or anything else strongly established by means of imagination), then I feel it's failing as a game, specially as an interactive game. I could just as well imagine things on my own.