The compressor you are looking at would handle an air sander however I wouldn't recommend getting one unless you have to. The real purpose of an air sander is to be able to sand in an a area where there is paint fumes. An electric orbital sander will do the same work but the spark the motor creates is hazardous around paint fumes.
Paint fumes are one Steve, wet conditions are another.
I use air for all of the stone work I do, lot's of water in that environment.
Air sanders are much more powerful to me as well. If you have the air, they are well worth having around.
The amount of air you need, depends on what you do.
I do way more than woodworking in my shop. Metal work likes air, cutting, grinding, shaping, and blasting, they all use quite a bit. So does stone work, and mechanic work. I started this time with a 60 gallon 5HP 2 stage(used), the pump died so I upgraded to a pump that is capable of producing 17CFM at 90psi. The weak link now is the 5HP motor. I can keep the compressor running non-stop when I am blasting, or shaping and polishing stone. The motor gets too hot for my liking so I have to keep a fan on it. When it dies I will step up to a larger motor.
I never would have thought I would be doing this much when I bought a Cman 33 gallon oilless compressor 12 years ago. In hind sight I wish I would have saved that money, and bought a larger unit initially as I was always waiting on that compressor to catch up.
Here is the comparison of the pumps, old is on the left.