"In my personal opinion (not speaking for the ITAC), ABS *should* be allowed somehow, because it bugs me that we have to disable stock go-fast equipment to race a car."
I don't consider ABS a sensible allowance-let the driver control his braking. Sheesh!!

"But obviously there are issues since allowing wheel speed sensors also makes traction control possible, and I don't think we want to go there."
Absolutely!

"And Matt, some cars really have an issue with their ABS systems when you unplug the wheel sensors, and on those cars you pretty much have to re-do the hydraulics to bypass the ABS systems entirely. It's a lot of work."
I don't know of ANY car that doesn't default to old fashioned hydraulic brakes when ABS is defeated.
I invite you to provide the specific exception.

"So there's no easy answer"
There is. Disable ABS. If engine management demands VSS (vehicle speed sensor), allow the sensor or axle it requires (but not 2 axles). End of problem.