[M]aybe Kagan's view that sanctions could "trigger potentially explosive unrest" in Iran is correct. But I'd wager that this is, at best, attempting to hit an inside straight. It might, in desperate times, be worth trying but it's not a bet that's likely to pay off.
But let's suppose we make that bet. And lose. What then? Our chip count is smaller still and we're left with only one more card to play: military action. If and when we make that play we can expect Iran to call the bet, not least because there's little downside to them doing so. Western strategy, essentially, consists of trying to bluff Iran into folding. But the Iranians know that we're bluffing because they know that we don't really want to have to resort to military action, not least because they know that we know that the odds are that any such strikes would be, at best, a temporary victory for the west that will probably only delay Iran's final victory - that is, the acquisition of a nuclear weapon.
Which is why some kind of policy that assumes Iran's future nuclear capacity (at some point) makes sense. Because it's hard to believe we have any workable alternative.