The sage was not meant to solve anything. He was written, depicted, and praised as GOD within the context of the story. That is to say, modeled after the depictions of GOD in this world, he does not solve anything. He intervened to help stop his mother, but that can be considered a god foiling another god's plots. When it comes to human relations, he simply observes and leaves it up to them to solve things. This can be understood from him saying that he has observed all of the incarnations of his sons, yet the fact that they are still fighting means that he has not once stepped in to stop the war. The question we should be left with is not "how can he solve the problem?" but rather "why doesn't he solve the problem?"
The answer is most likely the same reason he has observed the incarnations of his sons throughout history: because they are his sons. A parents role is not to solve sibling squabbling, but to hope that they are able to solve it themselves. He made the mistake of choosing sides once and inadvertently caused the sibling rivalry in the first place. Though he could have easily chosen to not give Sasuke power, especially after hearing his answer, he did not do that. Is it because he believes in Sasuke to make the "right" decision? Is it because he believes in Naruto's ability to solve the problem? Or is it because he believes in both of them, and that he hopes they both come to terms? I don't know, but what do you think?
