The RR Blackhawk was used to fit RTM322 engines and was only for testing.
I'm not sure what parts of the S-70 wouldn't meet FARs, and perhaps Uncle Nick could illuminate the confusion here. I'd bet it was in the areas of systems safety, possibly field of view and the like. Performance is indeed wonderful.
And some of the issues about the way it flies and the stuff that's in it is probably out of the control of Sikorsky. 'The Army wanted it that way.'