If organics become buried in sand, it reduces the amount of oxygen available, and a different kind of bacteria--anaerobic vrs aerobic--grow instead. These bacteria can produce toxins as they break down the organics, which wouldn't be good if the area was then disturbed, releasing these toxins into the water.
however, this will depend on what kind of fish you have, etc. I have 2 tanks that have nothing but sand. Both are planted, and have had or currently have digging fish. In the two years these tanks have been running, I've never had any problems. Some plants don't like sand, as it can pack more tightly than in larger grain sized substrates, but most plants will be just fine. You will probably need to fetilize, or stick with plants that don't get a majority of the nutrients through the roots--unlike gravel, mulm does not build up in sand substrates.
Another consideration--all sand is not created equal. Some types, notably aragonite, are calcium carbonate based. This will raise the pH of the tank as it breaks down, which may not be desirable. Most play sand is silica, though, and will not alter water chemistry.