I disagree.
Known for it's accuracy?
Out to what range?
I think people are completely forgetting that it uses a pistol round.
This is one of the reasons it was low on recoil and made for close-in work.
I think you are trying to compare what you know about pistols to the PPSH, simply because they use the same kind of ammo.. thats just not how it works.
SMG's, and the PPSH in particular, has a much longer barrel than any pistol, something like a 80% increase if not more, that means they fire at a much higher velocity (longer barrel = more velocity), whilst pistols generally start to struggle past 25 meters, SMG's will generally be effective up to, or even past 100 meters.
Long barreled SMG's are certainly nothing like a shotgun, they are quite accurate within their effective range, not bullseye accurate like a rifle, but you should certainly be able to get a good grouping on a man sized target at 50 meters or more.
Also, the Russian SMG's in particular should have an accuracy advantage, the 7.62x25mm is a necked down pistol round that is well known for its long flat trajectory, coupled with low recoil, thats really the secret behind the PPSH, what made the gun what it was, it was very accurate, had low recoil, and a very high rate of fire, there's a damn good reason we often see photos of Germans carrying captured PPSH's, they where great weapons!
As for game balance (im adressing this broadly), its not a big problem if we got a realistic loadout, right now a realistic PPSH would be damaging to gameplay because its issued with a small truckload of drum mags.. we should only get one drum, and then a fistfull of 35 round bannanas, thats what the troops where given!
Without the unrealistic supply of ammo, the PPSH is nolonger a huge problem, and it does not need to be nerfed to oblivion and back.
But ofcourse the issue goes deeper than just that, the whole way recoil is coded for all RO weapons is a bad joke, you just dont notice it with the rifles as they are a one-shoot deal, the whole thing needs a revamp, not just the SMG's.