We just finished Silent Hill 2 over the weekend and I'd forgotten what a wreck that game leaves you (this is the only game I've ever played that continually gives me nightmares). The whole series is disturbing but Silent Hill 2 is truly the icing on a psychologically damaging cake. I think it's probably one of the scariest games I've ever played (if not the scariest, period!). Probably the only other one that comes close is the remake of the original Resident Evil for the GameCube (which perfectly nailed its atmosphere). But even REmake can't compare to the journey taken by James Sunderland, and after some discussion with my husband (bless him for being so willing to listen to me ramble about made up characters in a made up world) it's because nobody is a Chris or Claire Redfield, or a Jill Valentine. But a lot of us, potentially, could be a James Sunderland. Under the right circumstances (or the wrong ones, depending on how you look at it).
Does it make a story more interesting when there isn't a clear cut "bad guy"?
I've been writing (because that is what I do) and the deeper I get the more I realize there isn't really a designated bad guy in my story; there are just people whose views and situations are all different. And they need different things. And sometimes those needs clash with the needs of others, and that is where our conflicts come from.
Though some people are just asshats, too.