Some cues from the wikipedia page of Ultima IV remind me of this discussion:
Virtues
The codex symbol shows the relationship between Virtues and Principles, using eight colored lines and three colored circles.[3]
The eight virtues of the Avatar, their relationship to the three principles of Truth, Love and Courage and how the gameplay has been designed around them are as follows:
Honesty: Truth
When purchasing goods from blind merchants the player is required to enter the amount they actually wish to pay. Although the player has the option of paying less than the merchant has asked for, this will mark the player as dishonest. Stealing gold from chests owned by others (i.e. all chests found in towns, villages and castles) will also penalize the player. This Virtue is embodied by Mariah the Mage.
Compassion: Love
By using the Give conversation subject, a player can give beggars alms and in doing so demonstrate compassion. This Virtue is embodied by Iolo the Bard.
Valor: Courage
Valor is displayed by the player defeating enemies in combat and not fleeing in a cowardly fashion. This means that when retreat is necessary, the player should be the last party member to leave the field of battle. This Virtue is embodied by Geoffrey the Fighter.
Justice: Truth and Love
Not all of the hostile creatures in Britannia are evil and the player must avoid unprovoked attacks on those that are not. If attacked, he should resort to driving them away rather than killing them. Out of the eight virtues, this one requires the most finesse to embody and is a particularly good example of balancing ethical dilemmas. The player's party must stand their ground for Valor, yet drive their foes away without killing them. This Virtue is embodied by Jaana the Druid.
Honor: Truth and Courage
By completing quests (finding sacred items) and exploring dungeons the player demonstrates their honor. This Virtue is embodied by Dupre the Paladin.
Sacrifice: Love and Courage
If the player goes to a place of healing while in good health, the player can make a blood donation and sacrifice some health in doing so. This Virtue is embodied by Julia the Tinker. In the NES port she was replaced with a male character named Julius.
Spirituality: Truth, Love and Courage
Meditating at shrines, consulting the seer, and achieving enlightenment in the other virtues enhances the player's spirituality. This Virtue is embodied by Shamino the Ranger.
Humility: None, though it is considered the root of all virtue.
The player demonstrates their humility during conversations. A boastful response to a question results in a penalty, a humble response results in a bonus. This Virtue is embodied by Katrina the Shepherd.
All that said, I think the D&D version of the paladin needs to strictly or not so strictly enforce a set of rules, varying by deity, sure, but e.g. I was in a group today including a LG fighter who stole a suit of armor from a murdered knight, that was on display in a tradeshop, and then when he was caught covering up his crime he ran away. So many virtues trampled on. But that's fine, he has no divine retribution for his sins. A paladin ABSOLUTELY should have. It's too bad if you don't realize it at the time, you should know that stealing is unlawful, even if it's stealing pilfered goods from unscrupulous merchants, because your god should see / know everything. Atonement and punishment go hand in hand, there can be no dramatic arc of the fallen hero archetype. The Dark Knight had to "fall" before he could rise. And that was a ruse. In a paladin ethos, it would be akin to Superman losing his powers if he killed someone out of lust for power or with disregard to what's right and true, or Spiderman losing his until he Mary Jane was threatened and he had to get his head back on straight. I love those story arcs. And I definitely would want to see paladins have good powers that people would salivate over, but not be willing or able to sustain it due to the moral code it enforces. I can literally see adults all the time playing D&D unable to follow this simple code! They almost always revert to the selfish, covetous bastards they are, lurking in their souls.
Playing a paladin is not easy for most people, and nevermind the stat requirements, it was the RP requirements that felled them. In DDN it's probably too tough to change the class entirely to a fighter instantaneously, but having their divine powers simply cease to function until they atone should be do-able. E.g. Divine Smite, or Bless Weapon or whatever, none of that offensive capability should work without it. Maybe he can lay hands on the weak for a while, but not himself. If he does something consciously evil he should be able to turn over to the dark side, so to speak, and begin worshipping the evil deity and resume play as an anti-paladin, or perhaps go through warden first, though the nature flavour doesn't mesh well to me.