Going without the sandbox means hobbling the LLM. It can do things directly but is less able to construct ad-hoc programs to deal with looping, conditionality, tame verbosity, connect tools together, and so on.
It's a choice to not give the LLM an environment. As you say, it can be necessary if you're using dumb models. I don't find it particularly worth the trade most of the time.
These guys are the common factor, the guys running the evals that let all the AI agents out, it looks like.
Think of an agentic harness as like a kind of body for the LLM. It gives it primitive inputs (read_file, web_search or whatever) and primitive outputs (edit file, respond to user, etc). Give it a command line environment (in a locked down sandbox, with as few or as many tools as you prefer), and you've given it a toolbox. It can do a whole lot more, faster and more efficiently. It can compose tools together. It makes fewer transcription errors manually shifting data around. It can tame verbosity with good protections in the harness and access to grep, sed and awk.
It's really up to you how useful you want your agent to be.
If you don't have something running somewhere, you don't have an agent, you don't have a harness. You've got a token generator, an LLM from the 2024 era.
You could build something with storage and composition out of MCP functions, but come on, have you seen how LLMs - particularly budget LLMs - try and invoke functions reliably? The amount of retries you have to hide, feedback you need to send back to the LLM about what it did wrong. Parameters get replaced with synonyms, arrays are passed for singular arguments and vice versa, structured inputs are flattened, etc.
So maybe you fine tune on interactions with your subset of MCPs, to improve reliability. But all you end up doing is reinventing a Unix-like command line, poorly.
Firecracker micro-VMs, gVisor, wasm sandboxes. There are ways to make this work that aren't heavyweight. Giving LLMs tools that they've seen how to use millions of times in training corpora just works better.