I still have hope that the Democratic Party will, one day, become the civil liberties champion it needs to be. Having the Army general with oversight over Abu Ghraib run for the Senate as a Democrat isn't going to help that; it'll only be worse if he wins.
I consider myself to be a big-tent Democrat. It takes all sorts to make a coalition like ours, no matter how frustrating it is. But there are limits to this, and aside from the torture issue, Sanchez is a failed general. The Republican party is the one that tends to reward spectacular failure with constant and increasing rewards, not the Democrats.
That's the problem with Sanchez: no matter what defense is offered for him, he ends up a failure. If he really didn't know what was happening at Abu Ghraib, then he fails the basic test of leadership. If he did know but was just following orders, then he fails the basic test of humanity. Either way, it's not worth gaining a Senate seat if the cost is having this guy become one of the most powerful and influential Democrats in the nation.
To top it all off, if he runs it'll just be another case of trying to get voters in a red state to choose a faux-Republican (soldier, tortured Ay-rab terrists) over a real Republican. It has no chance of working while ensuring that money is diverted from better races to prop up his failed candidacy.
Update: In comments, Greg points out this Atlantic article about Gen. Sanchez. It's well worth a read, and portrays Sanchez as having rather more integrity than pretty much anyone else associated with Abu Ghraib or our conquest and occupation of Iraq, certainly more than any Republican who has ever been caught being incompetent or doing something wrong.
I stand by my assertions that Sanchez, at best, failed as a leader during his tenure in Iraq specifically because of what happened at Abu Ghraib. I also believe that, if he does run for the Senate, he will end up as yet another failed attempt to fool conservatives into voting for a Democrat that falls into certain demographic categories. Despite the right's constant bawling, identity politics is something they specialize in and something only they, usually, manage to do well. Democrats usually just don't care that someone was a soldier, and Republicans have shown that their party identification is far more important than anything else, certainly more important than whatever sacrifices made or heroics performed in service of this nation, if that person makes the mistake of being a Democrat.