A lot of BS in this thread
Sorry but there's nothing collectible about a well used 29-2, with no box, no papers, no factory grips and in the described condition...
The OP has not provided pics, so we don't know how bad the "rub" is. The OP never said the gun was "well used". So it has a rub, and rubber grips and its not a collectors item? But you say you don't collect, right? So you then don't know what you're talking about. If you're a shooter, talk about shooting. Talk about what you know about.
There are 3 factors that determine a gun's value, and its NOT CONDITION CONDITION CONDITION, its condition, rarity and demand. The gun has IMO above average condition, esp if the OP bought a pair of correct wood grips, it scores low on rarity as others have said BUT it scores high on demand. If the OP put a pair of original grips on it, and maybe cleaned it some, its easily a $600 gun if original nickel (will have a "N" stamping on the rear face of the cyinder, and on the LEFT grip frame, underneath the grips). While tapping it is not necessarily blasphemy, its not wise from a financial stand point. You can "shoot every damn gun" you have, and be smart about it at the same time.
The wise choice here is to find a pair of correct wood S&W grips, and sell the gun. The reason being that the grips aren't hard to find, and will add to the value of the gun. Drilling it would cost some money, and would tank the value of the gun. On top of that, 29-2s are not the most durable 29s. For your purposes, I would look at a nice used 629 Classic DX. You get the S&W trigger, stronger constructions WITH the durability of SS AND IIRC nearly all 629 DXs are factory tapped. Its a win-win. They're not a high demand gun either. Perhaps someone would trade you even up because many people long for the P&R guns.
Its value is as a shooter. In which case, drilling & tapping in the later factory manner will not decrease its value. It may even increase it, to the right buyer.
The problem with your statement is that people who shoot these a lot often don't buy the older 29-2s and earlier guns. They buy either a 629 or a newer 29 for shooting. There is no way that the tapping would increase the value, because the guy who would look at it after its tapped would not pay the guns value + the tapping charge. You would be lucky to get retail for a 29-2 with it having holes in it. A perspective buyer would want a fair price for the gun, meaning you ate the price of the tapping and probably more. He also may negotiate down since its not original even if he wants a shooter because that will save him money even though he doesn't actually care about the collectibility. The market for a drilled and tapped 29 is extremely soft, with no demand at all. Shooters want later, collectors want original and a lot of times great condition.
Just because you want to shoot doesn't mean you have to also make stupid financial choices as some would have you believe. Tapping the gun for shooting is not worth the time or the money at all. Right now, some guy out there wants it and will pay for it, esp if you get the right grips. Let him have it for the most you can get, and then buy something like a 629 DX and you will be happy.
29-2s are special to a lot of guys, let one of those guys pay for yours. That's what I would do.
Here is mine, and yes, it is a collector's item despite not having a box or papers.
