Because NPAPI (the plugin API) is specified in terms of native OS handles (HWNDs on Windows, X ids on X), even a sandboxed plugin naturally has access to stuff

Because NPAPI (the plugin API) is specified in terms of native OS handles (HWNDs on Windows, X ids on X), even a sandboxed plugin naturally has access to stuff like your keyboard, mouse, and can send keystrokes to your desktop. This sandboxing of Flash is a step but I don't think it will help much.