Thats not bad for 10 yards ...a taller front sight would fix it ..or like you said fileing the rear sight would too ...but ..from past experience , first I would try some different loads ..maybe lighter bullets and such and I`ve had one that the POA changed after it broke in good ..
I`ve got an 1871 open top on order from Taylors right now ...wish it would hurry up and get here ..The shipping to my FFL is always slow .
I bought the one chambered for 45 schofield ...I switched all my loading to the 45 Schofield rounds ...little lighter punch without adding fillers in the 45 colt brass , could have got it in 44 center fire also ..but I`m just not set up to reload those .