Level 5 : I'd say it never hurts to have a bigger damage output, but it's up to personnal preference. The extra ammo might come in handy (even more so on higher difficulties and later waves), but if you don't spam too much, you can actually do fine without it. In fact, the extra damage along with the next skills inflict so much damage that you might even save ammo !
Level 10: Ground fire is just the way to go. It deals an absolutely ginormous amount of damage. It may not seem like it with the caulk'n'burn, but when you bring out the flamethrower or the MWG, you will simply melt everything...including the big zeds.
Level 15: Again, both are viable, but I think the ZED shrapnel is the better option because it can make short work of a group of trash. If you combine it with ground fire, you can make a marvelous fireworks show! It's better in my eyes,because it will quickly inflict a good amount of splash damage, while the fire might take a while to take a good chunk of health. Also, even if the zeds don't die right away due to the explosion,they can be knocked off...Which make them easy target to the ground fire (which will make crazy DPS)
Level 20:The firebug have always been more of a "short-to-middle ranged" perk anyway, so increasing his weapons' range simply isn't his thing. Meanwhile, increasing the stumble of your weapons can actually increase even more the suppressing advantages your weapons already have due to the afterburn! And once again, add "ground fire" into the mix and nothing will stand in your way...
PS:It might seem obvious,but to maximize the damage output of the perk, it's better to get the microwave gun as soon as possible. The trenchgun doesn't seem to benefit from ground fire , which is certainly one of the most important skill the firebug has. So besides as a sidearm, you shouldn't use it as a primary once the fleshpounds start to roll (wave 6 in a long game) . Also keep in mind the fleshpound has extra weaknesses to microwave damage! ;-)
PPS: Don't forget the Microwave gun has an alternate fire , which inflict a strong knockback... This is useful, even against the bigger zeds!