
Well, this dichotomy is exactly why so few stick it out when it comes to doing the more advanced aspects of Mentalism vs. Mental Magic; the performer cannot reconcile such issues and, as Richard Webster said long ago, if you can't deal with the fact that people are going to view you as being Psychic, go back to your sponge balls and card tricks.
The "Criminal" side of this coin that becomes the "moral delema" so to speak, is our confusion over the whole "boogus psychic" issue and the LIE... here, I'll say that a bit more clear for you...
THE LIE certain people put out there about "all" psychics being con artists and predators.
Sure, there are Readers out there that will size you up in order to take you for a ride, I can't say that's not true. But I can also point out that this is not the case most of the time; such predators are a minority in the business. Assuming that "all" people that do this kind of work are crooks is about as truthfull as saying all magicians are out to do three card monte or lift wallets... that was a truth about magicians and sidewalk performers for centuries but is it true today?
Only in a very small sense of the minority. But, there are magicians that do it and I can almost lay money on the fact that more of magic buffs are guilty of cheating and swindling than any of the Psychics I know... it's a part of who and what we are.
So, as I said previously, so long as you know where your morals and ethics lay and you don't cross that line into the ways of things questionable, there is no wrong or fowl.
The "middle ground" to this would be to simply shrug things off and allow folks to make up their own mind...
"I don't know what you might call it, I've done it, it's fun and I don' think Casper the ghost is working throgh me when I do it..."