Sandbox mode can also be referred isolation environment. Lets us see some Pros and Cons when registering the plugins/custom workflow activities in Sandbox mode.
Advantages:
- Can make use of the full power of the Microsoft Dynamics CRM SDK
- Have access to external endpoints like Azure Cloud Services.
- CRM collects run-time statistics and monitors plug-ins and custom workflow activities that execute in the sandbox.
- If code exceeds CPU Memory or is otherwise unresponsive, it would be killed by the platform
- More secure, collects run time statistics and reporting
- Platform collects runtime statistics and were populated after 30 mins to 1 hr
- Can access the network through HTTP, HTTPS protocols
- Anonymous authenication is allowed for plugins
Disadvantages:
- Access to localhost (loopback) is not permitted.
- IP addresses cannot be used, web address requires DNS name resolution
ECELLORS CRM Blog 
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