Your correct, pulling more water would tend to lift more sand. Lifting the pump shouldn't make any difference is how much sand he is getting. The water is coming from the same place regardless where the pump is.
He should drill a new well, but I know he doesn't want to hear that.
Convince him that the smallest pump for the job is the best. More horsepower does not have more starting torque. The three wire does have more starting torque than the two wire motor, but the two wire Franklin has a switch that will actually kick the motor in both directions in an attempt to break the pump stack loose. The three wire does not have this ability.