If you want to use past tense, use "was" like you were describing something that you saw or experienced If you are settings the conditions or rules for something, use "should be" You can use D also to describe something in the near future but if you use this option you must change could to can because it is something that will happen so you need to say that it will occur

It all depends on the context of when it happened. But,I think: It should be as if they could see and hear us in action. ( to express assumption)

It was as if.... You could only say 'it were' with 'if' "If it were otherwise, then..." However, in that case you couldn't use the subjunctive 'as if' Strangely enough, I believe you could also use 'should' and 'would'. I can't say for sure, but I know you can say "It is as if they could..." 'It is' is present tense, but you can keep the subjective tense in the last phrase and still be correct.