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Neat! I've always liked it... There's a voice inside of you — God, our conscience etc — and we do want to behave/perform/be good in front of those we admire.
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Like not being a hypocrite?
Not wanking on about Bitcoin adoption but not actually using Bitcoin as a P2P payments protocol very much in reality...
If only Ron Paul could see your Stacker News wallet history!
I had a really cool professor who was obsessed with the impartial spectator idea. He always insisted that none of us were understanding it quite right.
I feel like the idea is useful, but needs to be refined. I don't really care what most people would think about my actions, because I don't have much respect for their opinions, so the impartial spectator is better as a hypothetical person who I admire but who has no particular affinity towards me. Something like "What if Ron Paul saw you doing that?"