While typical encounters may well be at bad breath distance, it isn't hard to see where situations past 5 yards could occur.
Example 1: Intruder in the home; parent takes guard position at top of stairs since spouse and kids are in multiple rooms on upper floor. How many yards is it from upper landing to lower landing?
Example 2: Mugger in parking lot; victim draws, at which point both duck to far sides of adjacently parked vehicles.
You get the idea. I would at least want to be able to score decent hits at a distance equal to the longest line-of-sight in my house.