Ok, now that I have my laptop, here are my concerns.
With a rogue able to do that, the best strategy in the game will become have two guys flank the enemy, and then have the rogue shoot his 3-5 arrows at him, each doing Xd6 points of damage. I'm a big fan of players working together (did two PDFs on that concept even), but with this sort of thing, it'll just turn into the flankers doing not so much, or at best being finishers.
I'm pretty sure that the line about flanking needing to be a melee attack was specifically to avoid this. It does sort of make sense in real life, but since rogues are tied to flanking, it can get a bit ridiculous. By the time the rogue is getting 4 attacks (level 8ish), that's an extremely easy +16d6 damage. The rogue is meant to have to work a bit to get their very high extra damage, and they can do that somewhat safely with a single shot at range, or much more dangerously, lots of attacks at close range, where they can't survive many hits.
My concern is that with this rule in place, the ranged rogue will actually be the one marginalizing, and worse, if the group has a sense of power gaming, the rogue will be dictating who to attack, using the other players mostly as puppets. I'm not a huge fan of that.
I worked on a change to sneak attack here that was for similar reasons. It also gets rid of the teamwork system that rogues currently need. In playtest, our crossbow rogue has been loving it since he can do his extra damage at range and can set up situations where he gets it. The damage is low enough (57% of regular sneak attack) that how often he gets it isn't a huge issue.
I managed to have my [level 2] rogue get off one sneak attack per round with a crossbow with some crafty maneuvering in and around a small "cliff" and a covered wagon. Without moving about to hide her location though, it couldn't have worked. Even if she had been higher level, I think it wuld have been worth giving up a full-attack.
Probably some GM fiat in there, but I had her running around, diving into cover, and then readying an action to shoot the first thug that came into view. Since they were charging over the hill and my gunslinger companion was out in the open fighting, they tended not to notice little Abigail on the side lines until it was too late.
Use Magic Device + Wand of Invisibility (or Greater Invis.). Problem solved.
Go invisible, get within 30', make your sneak attacks.
2. Feat investment
Or Dazzling Display + Shatter Defenses. 3 feat investment to make it happen. Move within 30', Dazzling Display, then full attack next turn. First hit won't be a sneak attack, but every follow-up attack (provided the first one hits) for that turn and the entire next turn will be. With this option, you don't even need to be the one who causes the fear effect. Have the friendly party wizard place a fear affect on the enemy.
Or use a crossbow and take a 7 level dip (more of a plunge than a dip at that point...) into Fighter/Crossbowman archetype. (this really isn't the best option at all...)