I’m against a sanity system. I see little hope in modeling them in a game such as this. In the games that feature such systems, a specific character is involved, and it makes it believable that these are HIS/HER fears, and though we may think they’re pussies for having them, it affects them regardless. For example, you have Amnesia, where the character freaks out over being in the dark. I think he’s a wimp and that that’s absolutely stupid because darkness is safety, but hey, it’s that character, it’s his fear, it’s believable. These systems work because they’re targeted at specific characters.
Take away the specific nature of the character, and the whole thing falls apart. You may find spiders scary, I may find cockroaches scary, they may find darkness scary, or I may find the color purple to be absolutely terrifying. Implementing a sanity system implies that all characters are the same person and will behave in the same way, and I feel this robs everyone’s character of individuality.