A speedier work around might be to buffer your point a bit and then use the buffer extent as the analysis extent to make an in_memory copy (CopyFeatures tool) of your SDE data, and then do a SelectByLocation on the smaller and local in_memory dataset. That way you are sort of making the SelectByLocation tool honor the analysis extent environment, which it would not normally do. BTW: Any features that overlap with the analysis extent will be copied with the CopyFeatures tool.
I sure wish the SelectByLocation tool and the cursors methods honored the analysis extent...