Your comments

While I appreciate the recommendations for alternate tools (I use and recommend iSSH myself), I think it would still be helpful to have Textastic include this functionality, even if it is as an additional in-app purchase. Two big advantages to this...

(1) My credentials for other systems would be stored in one app, no need for duplicate entries.

(2) My workflow would be simpler without app-switching, and Textastic or my SSH app would not see me as "idle" while I use the other.

That second point is worth emphasizing. I often need to both edit files and work on the command line of remote systems. When I do these things in two apps, then one or the other eventually logs me off, requiring I restart that session. If this were all handled within Textastic, it could be much more graceful about keeping sessions alive while I was, in fact, still at work.

I know this is probably not the highest priority of the developer, and real SSH terminal support is not a trivial undertaking; but it would make Textastic awesome if it came to be! Meanwhile, Textastic is great and I'll happily keep using it even without this feature.

You are absolutely right, Steven. This is not a barn-burning request, because there are other ways to deal with it. However, some users, like myself, really don't use the global PIN because we share our pads so frequently with family. I use the PIN on my phone, oddly enough, but on the pad it has felt too intrusive on the intimacy of the device. Anyway, it would be nice to be able to lock down the few apps with special access to client systems, and Textastic is now one of those.

So I put this in the "would be nice" category. An option for those who work a little differently on their pads. Obviously, lacking the lock did not stop me from using the app!
I found the Textastic way confusing at first, but I think it may be very good for the iPad. It just takes getting used to. I've downloaded just key files that I edit a lot from various sites into a small, efficient directory structure in Textastic. Since the app remembers where each file came from, I can leave the server filesystem behind and just focus on the files that I usually need to fiddle with. It also means that the app is not downloading and syncing a lot of files I don't need (images, for example).

So, I guess my bottom line would be that maybe such a "live sync" option would be helpful (more Coda-like), I would want to make sure Textastic preserves the "lazy sync" technique it currently uses too. Alexander is right to note that behind the scenes these two options are much the same, but in avoiding a full reconstruction of the server filesystem and the need to always resync everything, Textastic ends up more appropriately scaled to the iPad.
This would be a helpful option, similar to iSSH. There should be some reasonable inactivity timer attached to this, so that it only kicks in after so many minutes (5/15/30) of inactivity.
Thank you so much for adding this feature. You and I had a brief twitter exchange about this when you launched Textastic, it is great you finally got through all the government hoops to add it. Thanks for sticking with it!