> To make the most facile counterpoint - the reason the Skyrim blacksmith doesn't care if the main character slays dragons is because they weren't programmed to. There aren't consequences either way.

In the actual game, NPCs do care, in fact they often won't shut up about it. They just don't let it affect their lives, which is the point the OP is making.

> When the metaphorical dragon comes to burn down your village, are you going to shrug and go back to looping your hammer_nail_03 animation?

When such a disaster strikes a village those are often scripted events that do change the loops of the NPCs previously inhabiting the village. They are programmed to adapt to a new cycle of rebuilding the village or even assisting the main character in dealing with the threat.

It's funny that the assumption is the NPCs don't care about anything that happens in the world when there are games with NPCs engaging in entire rebellions against their oppressors. It's just that NPCs don't care beyond their immediate objectives being fulfilled. Once the rebellion succeeds and the tyrant is overthrown most of them just settle back into their usual loop.