It absolutley is up to Sydney ATC to decide. Taking it to Canberra is a laughable suggestion, and a waste of everyone's time.
We are talking about a VFR clearence into class 'C' airspace in the vicinity of a STAR (CAA8) into Sydney, with turbos and jets on descent with the STARs associated height requirements. Throw into the mix Sydney departures and their height requirements, plus the required 3 n/m seperation from the PJE aircraft, for 2 hours worth of parachute drops from FL140. And it's not just the one level they'd be seperating from, but every level in CTA beneath the para aircraft. I really have no idea why Sydney ATC are not interested...
The difference with WVA is that it is not in the vicinity of any STAR, and far enough north (45n/m) that getting departures over the top of the drop zone is not an issue. But even then it is a pain with Jet arrivals from the south into WLM, as the first enroute sector have to seperate 5 n/m from the entire drop zone.
Sydney ATC are not being mean just for the sake of it, it would simply have an adverse impact on too many factors to be considered.