Isn't this really just an inappropriate use of a string instead of a list? If indeed this is in the documentation, it should be changed.

I still don't like:
>>> p.add_argument('a', choices=list('abc'))
but at least it would work.

This call to list() could be done internally, but I think passing in a string is a bad practice and argparse should not contain internal workarounds to cater to this usage.

If you're proposing that argparse should use sequence iteration instead of the "in" operator, I disagree with that solution.