What version of the game are you using? Many of the weapons were re-balanced after 2.4 so the values are different.
Ok, I was playing 2.4.
In 2.5, the pistol vs. rifle accuracy difference is not as huge as it might be in real life. This is partly because the battlescape occurs across a shorter range than real life. The other reason is that pistols already have major drawbacks in terms of weapon power, so I have made sure their ranges are not too prohibitive for them to be used.
I was mainly addressing the angular spread value. (so independent of battlescape range)
This should be much lower than for assault rifles to make things a bit more realistic.
Maybe the drawbacks in terms of weapon power are too big? (without armor, pistols have an even greater stopping power than rifles)
On the other hand, in reality, military units don't use pistols too often, except perhaps in houses.
I think you should not add unrealistic stats just that people use a weapon more often.
With the excellent TU cost the pistol could still be useful in houses for reaction fire, as you said,
but it feels strange to get killed by plasma-pistols with the first shot over half of the map,
whereas I cannot hit properly with an assault rifle.