
It has its place in a general "What is roleplaying, and how do I do it?" introductory section in a guide for players, where it is but one of several possible pseudo-psychological systems. It has absolutely no place in game mechanics.
I play PnP regularly, with a system without alignment, and it works just as well. There is absolutely no need to cram a good-evil/lawful-chaotic scale into the rules. How to play the character, should be up to the player, within the restrictions of his role. If the character has been trained as a thief, but gets "reformed" and behaves just, heroic and never lies or steals - why not? After some time, he'll not really qualify as a rogue anymore, of course, and will develop other skills. (That counts as changing class in DnD-speak, I guess.)
I do not think that players need the crutch of an alignment in the background. It may help an individual player to orientate the actions of his character on a certain alignment in the sense of a simplified pattern of human behaviour, but I don't see the need to force that particular system onto each and every player.
That said, I don't like character classes that much either, but that's another thing.

Reputation with various power groups and factions is another issue, and imho wholly independent from alignment. How people look at you depends on what they know or think about you (and the factions/groups you belong to), not some abstract categories of behaviour.
My 2 ?-cent, or so.
