A .50 caliber submachine gun can only be so accurate.
Au contraire, mon frère. Tonight I was looking at just this issue. Using a vast amount of ballistics data I have collected I have come to the opposite conclusion, based on 3 factors.
A) The .50AE round the 12.7mm is based off of (per Elvis Sawyer himself) is a very flat shooting, accurate round, for a handgun round.
2) The barrel length on the 12.7mm SMG seems to be quite long. As the top feed magazine and the ejection port suggest, it seems to easily be in the 8"+ range. This coupled with the aforementioned ballistics of the round will get you pretty reasonable accuracy, for a pistol round. Much better than any of the other pistols/SMGs in the game. (except the 5.56mm pistol)
Other) This leaves only recoil as the major contributing factor in accuracy. But if you look closely, there seems to be a large section of frame situated to the front of the pistol grip. It seems as this would be a reasonable place to house an asymetrical recoil system, ala TDI's Vector SMG. This revolutionary recoil system reduces felt recoil to an incredibly low level, even for pretty powerful rounds like the .45ACP. The positioning of the magazine on the top of the receiver seems to back this up, as there seems to be no reasonable explanation for just what that large frame area might house.
http://www.youtube.com/watch?v=V6dO8TQ_7mY, and please note the low recoil.
-Gunny out.