The paraphrased dialogue wheel does make things worse, in my opinion. Because it's not the actual dialogue, it further separates the character from the player. It reduces immersion and decreases the emotional resonance you might otherwise have with NPCs and your companions. If you're like me, which would be very sad, then you know there is a huge benefit to having an unvoiced main protagonist. Because everything has to be written out and thoroughly read, you develop your own voice for the character. Everything that's written down develops its own tone and tempo in your head, and it makes the character more and more yours. In Dragon Age 2, you're a passive participant in the conversation, reduced to clicking a button that basically corresponds to, "Say something nice," "Say something snarky," or "Be a douchebag," and then someone else actually says it. Games like PS:T and Fallout had these options as well, but they also had class, ability, and - in the case of Fallout - sex dependent dialogue options. You had the ability to lie and outwit your opponents, or be clever - or not, if you were playing a character with low intelligence.
Some of the dialogue options that I see on the wheel, I wind up saying them in my head. Only Hawke sounds more like Sloth from "The Goonies." It just ruins the whole conversation for me.