Oh my, I thought the saving throw only applied to creatures in line of sight, but it also applies to the primary target. In that case I agree with the ruling sneak attack doesn't apply. Such a mean nerf :(
There *isn't* any "primary target" if you use Piercing Arrow. You simply use specified AoE instead of an attack.
It's Eberron, not ebberon.
It's not high magic, it's wide magic.
And it's definitely not steampunk. The only time steam gets involved is when the fire and water elementals get loose.