Nerfing the damage ---> more bullets/hits needed for a kill ---> Expanded Mag would be a "must-have" instead of a "nice-to-have" option. Bad idea.
@juliastorm: Disagree! Leave the MP5 as it is. No need for an Expanded Mag.
Who said to use smg at medium distances
I don't get what's your point here. We were talking about Expanded Mags and, in your case, about damage nerf; distances were never mentioned.
Apart from that, i would define SMGs as weapons for short-to-medium range.
Again: No need to touch the Mp5 ... it's good as it is.