My thoughts:
1) The sort of people who will attend an LP meeting to see Sheehan probably aren't going to be LP converts, but natural material for the Green party (or Sheehan's independent run). I'm not opposed to her showing up at our meeting -- PROVIDED that we get a commitment from her people that our candidate will be welcome at one of HER meetings as well. Exchanging views (and dialogue) are always a good thing, provided that it's a two-way exchange and the Sheehan folks aren't expecting us to carry their water without also hoisting one of our water buckets on their shoulders.
2) There is absolutely no reason to not run a candidate in San Francisco. In fact, the LNC considers this race one of the top 5 priorities in the upcoming elections. Refusing to run a candidate makes absolutely no sense.
Think about what you're asking us to do here.
You're asking us not to run a candidate because another candidate agrees with us on a single issue. That candidate is also a socialist par excellence, with economic policies (and international policies) that would do grave damage to our country. Imagine if I was to emulate this practice and demand that the LP not run a candidate in the presidential election, and instead support Dennis Kucinich because he supports marriage equality and we aren't making an impact anyway -- I'd be drawn and quartered.
Secondly, I daresay that your comments about the LP "not making traction" in the Bay Area are not a symptom of a lack of LP support, but rather a symptom of poor campaign practices (including not running candidates in local offices).
Parties earn votes by running credible candidates with credible campaigns who have something unique to say that speaks directly to people. As a national party, with a few exceptions, we historically have not done a good job of that. This time around, we will do a superb job of it, because a team of very motivated volunteers in California is ready to take up "the cause." We will have fundraising and the support of the LNC.
If we do our jobs correctly, we'll outpoll Ms. Sheehan in the final vote total. While Ms. Sheehan is good at getting publicity, I'd hazard a guess that she's rather poor at getting votes. She'll hurt the Dems and Greens -- not the LP. If we run a credible campaign, we'll be capable of bouncing the GOP out of the race and also growing our natural constituency.
As a Libertarian party member, I'm not interested in "strategically sitting out" key elections -- especially for the benefits of a statist. I suspect most party members in the registered electorate share the same conviction.
Cheers,
Brian