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Scariest? Um... no. Silent Hill, Fatal Frame, etc. definitely beat this game, though it does have its moments.
I like this game a lot, but it's more or less your standard FPS fare with some horror elements, mostly in the form of the Japanese inspired "scary little girl with long hair staring at you" variety, though there IS more to it than that. It has a good plot and everything, and FEAR 2 expands upon it.
If you get this game, I suggest playing it with the volume turned up and play at night, as the horror doesn't hold up too well in the daylight, like say the movie Paranormal Activity (as well as any other 'scary little girl' horror, like the movie The Ring). Its just one of those things.
Plus this game is too quiet, as the story is told mostly through intel which includes messages on phones, which can be drowned out and hard to hear unless the volume is up.