The only thing I dont like about substituting LR with sand is that sand can be disturbed, and often is, so its biological potential can vary wildly. That anaerobic zone you had one week could be undone by a fish or crab the next.
Overall though, I dont see a problem with using less LR. Its use should be in relation to the load in the tank and the water flow around it. Live rock that is less in volume, but has more water flow throughout its pores will do a much better job of filtering water than a tank that is stuffed with so much LR that waterflow doesnt even touch half of it. And its not like Sanjay is planning on a school of a dozen yellow tangs or something. By some standards, his load it low. He has alot of wide open spaces... so his 300g is more like a 150g from the standpoint of whats inside of it.
I hope to do this on my next tank as well. 48x30x18, a 115g, but with only about 80 lbs of LR arranged on aragacrete pilllars (to keep them off the sand). The pillars will elevate and magnify the appearance of what I have, but I suspect the elimination of 'dead-pockets' as well as the increased flow from all angles around the LR will increase its performance.