I think this is a misunderstanding of the PayPal payments standard system.
paypal standard is not a real time payment gateway. this means that when the user goes through the checkout and is returned to the checkout success page, the transaction is not actually completed yet.
when the user is directed to the checkout success page, the transaction is in a queue to be processed with the bank, this can take anywhere from 2 minutes to 2 days to occur.
when the transaction does get processed through the merchant bank, paypal makes an IPN post to the power store site to update information in the database.
So the question is "What does this mean for sandbox testing"?
there are 2 parts to sandbox testing with Payments standard:
1) The user experience, this testing is done by changing the confirm page to post to the sandbox server and tests the paypal account login, selecting the payment method, confirming the order, then being directed back to the checkout success page. This testing is really unnecessary though the real testing is the second part.
2) Testing the IPN post, this tests the stores IPN page to receive the post coming from paypal when the transaction is processed. This is done using the Instant Payment Notification Simulator in your paypal account. see the Sand Box Users Guide:
In the Sandbox Test Tools section for more details.
Power store does not have a way to set PayPal Standard to use sandbox mode, because the real sandbox testing is done through the IPN Simulator