So basically the Palladium line is that the game works best with an off-the-cuff blend of rules-based powergaming and freeform improvisation? I'd buy that--I bet that's true of lots of games, at least games that emphasize butt-kicking the way D&D and Palladium do--but that's demanding an awful lot of proficiency, maturity, and trust from everyone involved. It's plausible that with certain groups the rules even encourage that kind of play, but, again, I wonder how common those groups are, and I wonder whether it's reasonable to evaluate rules according to the extent to which they work--without explicitly saying so!--for that special, ideal group of players.
I'm, personally, glad that most modern games aren't like Palladium. I think that integrating freeform play works best when the rules explicitly allow for it--like I guess Castles and Crusades does--if only because it makes it easier for groups to know what the system expects of them.
I think there's also a space for comprehensive, well-designed rules, though, and I think if you look at the gradual progression that d20 has exhibited--from 3e to 3.5e to the new, hyper-streamlined SW: Saga Edition--you see that the mechanical understanding that designers have had for the rules has steadily increased over time; it's experiencing the sort of progression you might hope for from the sciences. It's neat, intellectually, that design has worked like that, and I think it's very important to have rules that accomodate beginning-to-intermediate groups, or those that for one reason or the other are most comfortable with rules that stand very well on their own, without requiring much improvisation.