What you heard is ridiculous. I can routinely hit a 12" blind flange hanging from the 100 yard target frames with my 2" .38. All it takes is concentration. Typically, I can get 3" rested groups out of a 2" gun at 25 yards, about as good as I can shoot the gun. It's the short sight radius. The gun will shoot, from a machine rest, much better, but the human eye can only do so much. The 4" gun, if the gun and load are up to it, can be shot more accurately due to the longer sight radius. I can typically get 1" 5 shot rested groups out of my Taurus 4" M66 using Lee cast 148 grain WCs and 2.7 grains Bullseye. I can only get about 3" out of the 2" guns I've fired the same load from. But, my 2" M85 is accurate enough to mow down 6" steel plates at 25 yards 6 out of 6 shots off hand if I really concentrate.
No, you wouldn't choose a snubby for Bullseye competition. However, you can have a lot of fun on a 25 yard range with it and it is DEFINITELY capable of accurate shooting past 25 yards. It does take some practice to master the 2" gun, however. That practice is part of the fun. If you find you're having problems with a certain size target, just shoot at a bigger target. Success re-enforces the ego. ;D
The people that tell you that you can't hit anything past 20 yards with a snub just mean THEY can't hit anything past 20 yards. That doesn't mean it can't be done by someone that can shoot a snubby. One of the big attactions of the snubby to me over my 9mm Kel Tec is the fact that I am more confident with it at longer ranges. The Kel Tec is 3.5" accurate at 25 yards, but is DA only. At ranges past 25 yards, I can fire the snubby single action which helps. I know, from practice, that if I have to shoot at 50, I can hit with the snubby. I don't foresee ever having to do that in a self defense situation, but it's confidence inspiring to know that you can.