I wouldn't go with the dex loss and what not. Blinded covers that. And yes the first answer does sound about right. Ranged touch attack with 5 ft increments and a -4 cause you aim for the eyes. Also I'd put on another -4 because you're unproficient with the "weapon". I would then possibly give the halflings their +1 to throwing. If it succeeds make a fortitude save.
I don't quite agree with a fortitude save 20 though. I mean fortitude DC 16'ish beats a snakes poison and you'd say a hand of sand is tougher than a snake's poison? I would probably make it so a fortitude doesn't negate but lessen the penalty.
Maybe make it fort DC 14 or 12. If fortitude succeeds person is dazed for 1 round. If fortitude fails person is blinded and dazed for 1 round.
Another thing I would factor in is a helmet bonus. The helmet should give a bonus. Now thinking logically hitting the person with the sand wouldn't be much harder if he had a helmet on (since there must be some seeing holes unless you got some gnomish glass caps to see through or something). However it would lessen the amount of sand that comes into the eyes considerably so I'd probably make it a +4 on the fortitude save.
So basically:
Ranged touch attack
Increment: 5ft
Save: Fortitude (see description)
When hit the creature is dazed for one round. If the character fails on a fortitude check (DC 12) the character is also blinded for one round.
If the character is wearing a helmet or some type of facial cover with seeing holes (mask, bandana) the penalty for the fortitude save is DC 8.
Do keep in mind with this action that to pick up the sand you initiate a pick up an item from the ground action which does provoke an AOO.
Now there is one thing I'm not quite keen on with this thing yet. That is the fact that a person wouldn't be dazed really. If I had sand hit me slightly in the eyes I'd cover my eyes and skip a turn. So dazed should possibly be changed into "On your next round you cover your eyes with your hands, arms, shield or what not. This gives you +8 AC on any next attempts to be sand thrown by the same person until the start of your next turn. This also makes you flat footed against that person until the start of your next round. "
However there isn't a great deal of difference in most combats between flat footed and dazed or blinded and dazed. You can't take an action anyhow and you both lose dex and dodge bonuses.
Oh well something along those lines just think something up I guess
Erky