As of today, the riddle sandbox is no longer mandatory. The close reason related to it has been deactivated, and the requirement has been removed from the sandbox text. It was an experiment to see if it would be sustainable and effective going forward; for a variety of reasons many of you have pointed out, it didn't work. (We also screwed up at judging the amount of support an idea needs before it has consensus, and offering enough time for a thorough discussion of the merits of ideas.)
But that's fine; everything is reversible, and it gives us all a better sense of the capabilities of the system going forward.
The sandbox itself is probably still worth keeping around, though without the mandatory requirement, because as a tool it could still prove to be valuable to anyone who decides to use it. Even if it's never touched again, it does no harm just sitting there. Unless someone thinks of a good reason it shouldn't be there at all, this is probably what's going to happen.
However, this still leaves us with a quality problem. The idea of a sandbox requirement came about in response to a growing sense that riddle quality is dropping on the site, and that it's becoming more heavily populated with low quality content. (Number sequence and cipher puzzles were even tacked onto the proposal's discussion for similar problems.)
Most of what I said regarding quality in the riddle sandbox proposal I still stand by:
Riddle quality is dropping. I think most of us have seen it lately: there’s been a slow slide in effort and energy put into riddles, and it’s starting to seriously hurt the site. On Stack Exchange, our goal is to optimize for pearls, not sand, and right now, we’re very much not doing this. If we were, it would not only push the quality of the site up, but also drive us to advance the state of the art.
Nowhere else that I know of on the internet do people collaboratively come together to develop new puzzles - including riddles - and that’s not something we want to stop. However, we need to do something to sort out what makes a riddle high quality for this site, and set better quality standards.
So it’s time for us to set aside some energy and effort to sort this out, and start over with a better structure in place to support riddles.
This is the discussion that I want to see continue. I think most of us recognize that there is a problem, and Hugh Meyers even offered insight into why the proposal might have gotten the sort of initial support that it did, even the idea wasn't ultimately very good:
The massive support the proposal had in its first day shows the widespread recognition of the situation and a strong desire for some sort of a solution.
I don't want to belabor the point, rehashing stuff you've probably already read and read again. Instead, it's time for you all to drive the quality discussion on meta.
What we've been doing, bringing these proposals to meta, is partially intended to try and drive discussion. This is where these problems are solved, and there's definitely a solution out there; we just need to find it. (And yes, perhaps more carefully consider its implementation and subsequent effects before diving in head-first.)
So please, please propose and discuss ideas on meta. Don't let this issue stagnate; mods are three of hundreds of community members, and we're all going to get the site that we fight for together.