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It is probably a easy way to keep track of what the groups feel about you so you don't walk up to a NCR camp and get shot without knowing what's going on. Not all places have Reps, but most settlements have them. In the last game they really gave no warning of what happened so if you walked in a town in Fallout 3 and they shoot at you, you're wondering what happened. I think it's good to have Reps, at the same time bad because all members of that group become hostile, and it has a problem with all companions except for non-humanoid.

The other Fallouts had reputations, but they were with individual locations, since few factions existed outside of their location. So if you set a midget on fire in the Hub the police would be after you every time you showed up there. There were some places where you had to side with one faction vs. another, but that basically decided who would be left in charge of an area, like the slavers vs. the Temple of the Union in FO3 or the Shi vs. the Hubbologists in FO2.

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