Wenger's position is that he doesn't want to strengthen a rival team. That idea is completely understandable. However, the choice to strengthen a rival or not doesn't exist. The choice is to strengthen a rival team now and get £50M or strengthen a rival in 12 months time for nothing.
It's more complicated than that. The pressure Wenger and the board were under last year will come into the decision making.
Can Arsenal play any potential sale so that the fans reluctany accept the situation? Would £50M buy an adequate replacement in this day and age? Who would be available? If Sanchez stays, would he be committed? Would we have a better chance to get back in the Champions League with him in the team? Would City still want him next year? Is there any chance he could change his mind on a contract during the season?
For what it's worth, I still think he'll join City this summer. It's just more complicated than a straight business decision though that others have mentioned.