I want to see an undead infested area. At the moment, paladins that focus on sanctuary and holy bolt aren't able to use half their powers. I think that the areas like Abaddon and the Pit of Acheron should only have undead in.
There's enough undead monsters to go around anyway, including souls, wraiths, skeletons (all of them, mages, archers, warriors), zombies (both kinds), vampires, doom casters, mummies, oblivion knights and dolls. Stack them all in one area.
Edit: Either that, or make it so sanctuary affects demons in much the same way it affects undead. I mean, I don't really think it'd overbalance much, since the paladin would still need to sacrifice using an aura like fana, concentration, or whatever, in order to use it (or use a weapon like Azurewrath).