"...Actually, a better option than Jordan raised at the time was the creation of a refugee “state” in the Sinai, perhaps encompassing a portion of Gaza..."
The Sinai is as hospitable as Mars. It's also Egyptian. They won't agree to it.
Therefore, regardless how good it sounds, Abdullah will never allow this to happen.
At the time it was under Israeli occupation. They didn't have to return it all, as they did, twice.
Actually, a contiguous state could have been created along the coast centered around Al Arish in the Sinai, possibly including Rafah and even extending to Khan Yunus in Gaza. No more inhospitable than Israel, and better for the refugees than the camps their Arab brethren have kept them in for the last fifty years. And at the time, probably a less disruptive solution that Jordan.
Not feasible now, barring a fatal Egyptian mistake (they are practicing canal crossings with their new Abrams tanks, so who knows what they’re thinking).