Thanks, Celerium, you stated that much better than I could. My preference is to just not allow such a houserule. BUT, if you were determined to realistically portray the ability to completely ignore an opponent as a threat, then I would insist on not only accepting the good parts. You want to pay no attention to him? Cool. Every single round he's lining up a stab to your jugular.
Which makes me want to create a little theater script, enjoy:
Player: Ok, so no way that warrior guy can hurt me much, I want to ignore him and focus completely on the rogue so he can't sneak attack me. You told me that's acceptable, right?
DM: Alright, if you insist. It's really not a good idea to do that...
Player: Surely nowhere near as bad as getting sneak attacked constantly.

DM: As you turn your back to the village guard, he takes careful aim and slits your throat with his short sword. *rolls crit damage* Fort save to avoid instant death, please.
Player: ....What?!!!
DM: You're letting him attack you at his leisure, what did you expect? He can do a tiger claw grab to your groin and see what souveniers he can take home, if you prefer.
Player: No....I'd rather choose option c) none of the above...
DM: Ooh! I know! He'll grab you, locking both his arms under your armpits, hands on your shoulders, to keep your motion nice and restricted.
Player: If he grapples me, the Rogue can sneak attack anyway!
DM: That is true...
Player: No way! I fight him off! *rolls grapple check*
DM: *rolls* Yeah, your 38 beats his...7. You easily manage to throw him off of you. *rolls* As you do so, the opportunistic Rogue attacks your weak spot for
massive damage!
Player: Wait, what? he can't sneak attack me, I'm completely focused on him!
DM: How are you both ignoring the other guy AND throwing him off of you? The rogue's just taking advantage of your momentary lapse of guard. That's...what sneak attack IS.
Player: This isn't what I had in mind when I suggested the houserule...
DM: Oh, then what? You wanted some minor penalty to completely deny the rogue his primary class ability?
Player: It's not
that bad... The rogue can still try to catch me flatfooted. Granted, that's hard to do and often requires set up rounds after combat's begun, but it's not like I'm completely taking away his main ability. Besides, he's still high level, with his magic items and skills and such.
DM: You know what...you're absolutely right. I had my doubts, but you've convinced me it's not as bad as I thought. I've seen the light, thank you. You can feel free to ignore the other guy. He'll be invisible to you, but not like he can do much to you anyway, so whatever.
Player: Halleluyah!
DM: Amen! Thank you, I never looked at it like that before. Ok, you've gone. Rogue's turn. He 5 ft steps back, pulls out a scroll, and uses his skill with magic items to cast it.
Player: Hmm, what'd he cast?
DM: You don't have spellcraft, you wouldn't know.
Player: Yeah, but I'm just curious. Can't you tell me? I wont metagame, I just want to know.
DM: Ok. It's a spell called "Pen is mightier than the sword."
Player: ...what's that?
DM: It's a spell i just made up now, inspired by your superior reasoning.
Player: ....
DM: It's a 20 ft radius emanation from the caster. Within the emanation, creatures, including the caster, lose access to all of their feats.
Player: That's not fair! I'm a Fighter! Feats are my main class feature!
DM: But you're still high level. You've got a full BAB, and I'd hope a backup ranged weapon, not to mention all your magic gear and hit points. You're not
completely gimped....
Player: But...but...my power attack! My weapon suprememacy! My attacks are almost nothing without them!
DM: Come on now. You still have a giant sword. You can always hang back at range and take shots with your bow. You're about as well off as the Rogue is without reliable sneak attack. Fear the d4 +2 damage!
Player: ...Screw it. I spend the first of my 4 iterative attacks to kill the stupid henchman. Full power attack. *rolls* 35 to hit, 46 damage.
DM: He dies! Congratulations, the Rogue can no longer flank you now!
