For careful accuracy testing, generally 25 yards is as good a standard as you're likely to see. A few gunwriters use different ranges. John Taffin does a lot of his shooting at an indoor range that only reaches to 21 yards, for example. Sometimes you'll see backup/snub/pocket guns tested at much closer ranges or a hunting handgun tested at longer ranges, but generally 25 yards is a good place to start for general accuracy testing.
Interesting how some of you guys START at 25 and then move on out. Heck, I can't even see my sights and the target at the same time beyond about 15 yards, and even there it is dicey.
During each range trip, I try to do some shooting at 3-5 yards, some at 15 and some at 25 yards. I'm looking for different things at the different distances.
At 25 yards, small problems in technique show up well on the target. I have to slow down significantly at 25 yards or it's pointless noise-making. I want to make sure I'm able to shoot good groups so that I know I'm not yanking the trigger or ignoring my sights.
I find 15 yards to be a good "compromise" distance. I can still shoot reasonably fast but if I'm getting sloppy it will show in the group sizes and flyers.
At very close range, I'm working on keeping the trigger moving, recoil control, maintaining a focus on my sights and also acquiring them quickly when coming up on target.
You are correct in terms of what you see at the range--at least that's pretty common at the ranges I visit as well. I see shooters who are unable to shoot 12" groups at 3 yards.
My wife and I went shooting today and there was an older man and his adult daughter shooting in the lane next to us. They never moved the target past 3 yards, weren't shooting especially fast and were regularly dropping shots out of the 12" scoring area on the target.
On the other side, there were a couple of guys--appeared to be a father and teenage son shooting. They were using a variety of guns--at least one with a laser sight. They were having variable success with the guns at distances from 3 to 7 yards but weren't able to consistently shoot 12" groups at the longer distances.
Shooting a revolver at 50 would essentially be like shooting with my eyes closed. I am impressed!
Shooting at longer distances isn't really all that difficult as long as you don't get crazy with your target sizes. I don't get much chance to shoot at distances past 25 yards, but now and again, a good friend lets me use his private range which has targets past 25 yards. Out to about 100 yards, there's not a lot of difference compared to shooting at 25 yards--the groups open up as expected, but if the target is big enough you'll still make hits.
At 25 yards, I usually shoot for groups. As the range stretches to 50 and 100 yards, I'm just trying to make a steel torso silhouette ring. Last time out, I tried to hit the 50 yard silhouette every shot DA with my .22LR SP101 while maintaining a rate of fire of about 1 shot every 3/4 of a second (about 8 shots in 5 seconds). After several tries I finally managed to do it a couple of times. Don't ask me what kind of group sizes I was achieving though!