Most good CRPGs have some form of character arc, though it's not usually a morality arc per se, more of a world-understanding and power arc, which can include some amount of morality as you learn of betrayals and are faced with interesting decisions where you're uncertain of underlying structures.

On the pure morality level, it's hard to even define reasonably in a single-player game. One appeal of the game is that you can do things consequence-free, or at least with different consequences than in the so-called "real world". To the extent that morals are heuristics of behavior evolved into us based on consequences from historical contexts, they simply do not apply the same way in a limited-consequence game.

Games that try to reward/punish/notice "morality" based on modern real-world sensibilities hamfistedly transliterated into a fantasy world with different cause-effect laws are unlikely to ever get it right; they're modeling it on the wrong level.

In a MMO, of course, some types of morality make sense - behaviors that detract from others' fun are generally verboten. Arcs in this dimension absolutely happen - ninja-looters or lazy greedy guildmates can reform and become valuable teammates, and the reverse is seen as well. I'm not sure these arcs should be encouraged by designers, though.