Being nice will ultimately pay dividends, if you're smart about it - people LIKE nice people, they are desirable companions and friends, and if you're not a total pushover you get respect for it, too. But jerks and their ilk just alienate everyone and end up isolated and disgruntled...unless they're really precocious.
Think of it like a long term investment. Eventually you'll end up well-liked and respected by a group of people who value ethical behavior. Victory in our time.
My in-game anecdote: the first guild I joined, I got scammed by one of the members - he sold me a crappy gold item that had the mods stripped off of it for way too much money (it was only 2-3k, but the thing was merch food). I was too much of a noob to figure it out immediately, but it didn't take long before I realized. I left the guild, found another one full of people who are nice, and stayed in it. So the scammer dude made 2k, which is really nothing, and his guild's paltry membership remained low. He sacrificed a long term gain for a short term one; and eventually, that kind of strategy leaves you SOL.
P

Because giving free stuff to someone "in Need" is impossible to gauge. If this Player is a Level 4 Warrior looking like he needs help...you dont know that he has 11 level 20 characters in HM doing FoW/UW/DoA/Vanquish runs etc.
Anyone can take off their virtual armor in an attempt to look like a poor friendless person who is in fact a somewhat rich person who's just too lazy to get their own stuff. I've literally seen people spam and beg for gold for a long time, then some random guy finally gives it to them then uses local chat to say that "hey im a nice guy!". That just makes you look completely stupid, and I've seen it a few times. Again, you might feel sorry for those lvl4 players in ascalon wearing starter armor but keep in mind that there's a possibility that they have other rich characters that they just didn't mention.