The problem is that allowing the holes he wants in sandboxing would defeat the security benefits. And that security is the whole point of the ordeal.

I don't know what the best solution is. Possibly allowing non-sandboxed apps in the app store, which go under extra review (possibly with a premium charge to defray the cost of extra review), or requiring the user to select a 'do not sandbox this' option when installing the app.

However, Apple can't give this app what it wants while keeping the integrity of their sandbox.