Mankind is all "sanctified/set apart" for the gospel as far as God is concerned. It's up to us to believe it to receive the gospel of the grace of Christ.
2 Corinthians 5:18-19 (NASB)
[SUP]18 [/SUP] Now all these things are from God, who reconciled us to Himself through Christ and gave us the ministry of reconciliation,
[SUP]19 [/SUP] namely, that God was in Christ reconciling the world to Himself, not counting their trespasses against them, and He has committed to us the word of reconciliation.
Hebrews 10:29 is stating this fact that all man-kind has been set apart or sanctified for the gospel of Christ. Reject Christ sacrifice and there remains no more sacrifice for sins.
Remember the word "sanctified" means to be set apart for use - not sinning.
Here Paul is taking about being the husband who is an unbeliever as being sanctified because of the wife.
1 Corinthians 7:14 (NASB)
[SUP]14 [/SUP] For the unbelieving husband is sanctified through his wife, and the unbelieving wife is sanctified through her believing husband; for otherwise your children are unclean, but now they are holy.
In the Old Testament we see that things were "sanctified or set apart" for a purpose or use.
Gold was sanctified or set apart for use in the temple as were the priests garments. The Sabbath day which speaks of Christ is sanctified as were other special days.