Because it was in black and white.
If they had color back then they would have known.
How you die does not redeem how you lived. - A black pastor on the life and death of Charlie Kirk

Remember that the bandits were desperate, and figured they hit a mother lode with the pelts and the burros they could now sell. They didn't take the time to feel or examine the bags, and probably didn't think much about watching the, uh, sand, as it filtered out in the wind.
BTW (spoiler for the book): In the book by B Traven (published 1927), Howard and Curtin find a little bit of gold that hasn't blown away. Not a lot, but maybe $3,500 worth, which in 1927 was about two years salary for a typical U.S. worker with a decent job.

Depending on its size, gold sand can actually look just like regular sand.
The bandits probably thought that Dobbs was using the sand to make the pelts seem heavier when he sold them.
So many stories, so little time.

I don't know. After watching several seasons of "Gold Rush", I don't know how anyone could make that mistake. Gold flakes are pretty much unmistakable for anything else. Not to mention the weight alone would be much greater than sand. I suppose in their rush to find something valuable, they didn't look too closely at what they had.
And, it is an important plot device so I can overlook that small flaw in the movie.
Democracy is the pathetic belief in the collective wisdom of individual ignorance. H.L. Mencken

Why didn't the bandits know what it was? They're bandits!
I think that in the film (although definitely in the novel) Howard explains to his partners that to inexperienced eyes, unrefined gold looks like plain sand. Therefore the bandits wouldn't have realized what was really inside the sacks
because
they're bandits, without the experience of prospecting for gold.
Most great films deserve a more appreciative audience than they get
.

I was wondering if the old man was crazy and it really was sand in the bags.