I've been shooting for a little over a year, mainly at self-defense ranges 3,5,7 yards. So, a few weeks ago, I picked up a couple of new pistols and for whatever reason, I decided to shoot at 25 yards.
M&P9 m2.0 4.25" and Walther PPS M2, both with standard sights. I typically shoot 4 rounds on a silhouette target and then bring it in to look. Typically I can put three out of four in the center mass of the target at 25 yards, somewhere on the chest area to the abdomen area. The fourth is on the white outside of the silhouette. I'm pretty consistent in hitting 3 out of 4 and sometimes get all four.
From what I was told, local LE qualifying requires 75% on the target from this range. I believe they use an IDPA style cardboard cutout. So, based on that, I'm hitting at a qualifying rate.
Obviously, I'm not putting up a 7" group at 25yards. Other than the supposed qualifying rate for local LE, I don't know how to quantify hitting center mass 3 out of 4 times: good, average, or well below average?
Note: I'm not an expert marksman, so take anything I say with a grain of salt, if you wish.
Also, I'm reasonably certain that all of my handguns can shoot better than I can get them to, so whether they will shoot 1.5 inch groups at 25 yds is largely irrelevant to me.
That said . . .
Based on what I've seen at my usual range, you're shooting well, or above average. Most people I observe at the range (using them as an "average") can't consistently hit paper at 25 yds, much less keep all their rounds in the black.
For myself, I have to say "it depends." If I allow myself an unlimited amount of time (not time limit/clock), and using any gun I desire, such as my GP-100 revolver in SA, I can shoot a 6 shot group in under 6 inches about half the time. Off hand, no rest/bags. Off bags that gun will pretty consistently shoot a bit better, around 4-4.5 inches, with any target loads.
With my S&W M&P9 2.0 my best 7-shot group @25 yds was just under 5 inches, but I freely admit that there had to be a fair bit of luck in that group. As an average, the gun with me behind the trigger probably shoots about 7-8 inches, again off hand, with no time limit. However, about half the time I'll shoot a group that stretches to at least 12 inches. Like I said I'm no expert.
Of course, this kind of shooting has little to do with a real life defensive shooting scenario, but I feel that shooting longer ranges helps me with trigger control, recoil control, sight picture, etc. Also, it can be very confidence-boosting when you get a better than average group. And fun, of course.
As to defensive shooting, a couple years ago I began shooting 12x20 inch steel IPSC silhouettes at both 25 and 35 yards, under time pressure, on the move, from prone/kneeling/standing positions, in low light. About 4-5 times a year.
What I found was once I stopped thinking about how far they were, I could consistently get first round hits in 'regulation time' though some hits weren't "center mass." I also found that it actually helped me to shoot faster. In other words, not to try to take time to get a perfect sight picture. "Perfect is the enemy of good," I guess. Now when I shoot faster, my groups at 25 yds on a paper target is definitely a foot or more in diameter, but now the group is usually centered in the 'chest/abdomen' area, so I feel this is an improvement of my earlier attempts two years ago.
Sidenote. This may or may not help you in your quest to be more accurate: Draw a one inch square on your target, or several; I usually draw 3 or 4 of them, spaced about 20 inches apart. Set the target at 5 yds and try to shoot 5 rounds into each square, no time limit. If you can pretty consistently put 4 out of 5 rds into each square, move the target out to 7 yds. If you can keep 3 out of 5 rds inside a 1-inch square at 7 yards on a consistent basis, you're a better shot than 90% of the normal shooters out there (excluding people like Jerry Miculek, of course). Then repeat with a 15 second time limit.
Regardless, if you can do this, then shooting inside 10 inches at 25 yards should get a lot easier.
But like I said at the beginning, you sound like you're doing pretty well. Just keep working on it every once in a while, and keep trying to push your limits and you should see results.