2-3 inch groups at 25 yards is very doable and plenty common at my range. That said we don't shoot sub compact handguns, the majority are in the 5-6" barrel length with adjustable sights and reloaded ammo for target shooting.
I've a few handguns that will shoot 1-2" groups consistently free hand at 25yards sometimes under 1" though thats on a good day every other 6 months
