He can learn Ultima, but his magic power sucks compared to Terra's. His Ultima is unlikely to wipe out the other characters. Terra's will.
Furthermore, I thought it was pretty much established that this wasn't going to be a turn-based battle. But if we're going to obey the rules of turn-based combat slavishly, Sabin's Blitzes can either: target multiple people, in which case they're unlikely to wipe out all of his opponents, because their magic defence is going to be too high; or target one person, in which case it is chosen randomly. If Sabin takes out Terra, he has a realistic shot of winning the match, but that is only a one-in-four chance.
But none of this changes the fact that if we're actually regarding this in terms of the game's actual storytelling, Terra can just morph into an esper, fly out of range of the other characters, and rain down destruction from above. None of the other party members has a defence against that.
By the way: Sabin's speed is a meagre four points higher than Terra's, which, even if we're going to accept that speed status makes a difference in a cage match, isn't going to enable him to pull off an attack he can complete before Terra can cast Ultima or swing the Ultima Weapon. Meanwhile, Terra's magic power is eleven more than Sabin's. That's a much more substantial difference. The only character with a higher innate magic power in FFVI is Relm, but even then, the player will likely have raised Terra's magic power to beyond that with Esper stat bonuses by the time Relm can be recruited.
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