He is one of the "dictators" err....democratic rulers of the Iraqi ruling party. That is the point you forget.
This may actually be helpful. The pressing concern is to minimize the violence and co-opt the Sunni leadership into the govt.
Al-Sadr is terrorist scum, but he's not on the same page as Al-Qaeda, who started this thing (Zarqawi wrote to Zawahiri of exactly this kind of plan for instigating civil war). If he helps stabilize the situation, an Iraqi unity government isn't going to demand we leave, and won't be controlled by the likes of Mookie.
Unless I am mistaken, although he has influence, he is not part of the government.