If I'm not wrong, it can be enabled by installing the "Director's Cut" setting in the menu. It also has a few other adjustments in there as well. I think Palantir doesn't get all flipped out unless you destroy the ring, for instance.
As for why it's not enabled on more locations, I think the simple answer is it's off by default
And an echo to the above thanks to Keith, what a great game you all put together for us.