I agree, there was a lot to like about Sandman. I just feel his story was so disconnected that it really didn't fit into the rest of the film. I wish a whole movie could focus more on him (not as Ben's killer, as you pointed out, but a potentially sympathetic villain), but this movie just didn't do any characters proper justice, most particularly Sandman. I feel the No Sandman Edition managed to do amazingly well with the remaining plot threads, giving everyone else proportionally more time and placing better emphasis on the relationships of the various characters. I really liked Redemption for improving the original plot, but I like this even better for changing it so drastically.
I'd be interested in seeing your edits whenever you get around to them. Good luck.