SMG accuracy is fine as is. At the range most engagements occur in RO2, the submachine guns are (as they were in real life) superior weapons in most cases. Once you accept that, you learn to adapt with a rifle and your team, and stop getting mad everytime you get killed with an SMG.
As far as the "effective range" argument goes - Effective range should be modeled realistically (at least for hardcore realism mode), but you also have to realize that you're not getting shot at with just one round, but a hailstorm of rounds with the PPSh. Even at the border of its effective range, at least one of those rounds will likely hit you on full auto. The muzzle-climb on a PPSh isn't bad enough to prevent accurate auto-fire (at least from the videos I saw of people firing them in the standing, unsupported position).
It's funny that players think they, as riflemen, should automatically win long-range engagements against players with SMGs, just by virtue of having a rifle. That's not the case.