The Yin-Yang Sanding Disc did indeed have the perfect solution to the demonic spirit problem.
Because the demonic spirit shared the same origin as Fang Xing, it had become difficult to resolve—even the Serene Ice Jade could only suppress it. If someone were to try to forcibly resolve the issue, there was a chance the process could heavily damage Fang Xing's True Spirit. From there, he would be considered fortunate if all that happened was having his foundation destroyed and completely losing all of his cultivation levels; if his True Spirit was scattered away like ash in the wind instead, it would be as though he himself had been killed and his path of Dao would cease to be.