Same here. I've got a BG2 sitting in gun jail at the moment, and one of the first things I want to do is replace that ridiculously wide rear sight.
Consider the BG2 philosophy of use...
It's likely true that pocket-mouse-guns' uses are close up, get-off-me firearms intended for one second acquisition and, if time allows... sight alignment.
I feel S&W was thinking about this when it comes to the larger "U" notch in the rear, I'll explain....
If found in an unfortunate situation of needing to utilize the BG2 for what it's built for, you may appreciate the rear "U" notch size. At first I recoiled at its canyon like size as well, until I thought about it... and did a little test.
Using a pistol rest at 10yds. away from the target, I centered the front sight equally inside the rear and basically shot out the 10x portion. Then pinning the left side of the front sight to the inside of the rear sight's left goal post... just enough to not allow light to be seen and fired 5rds. resulting in a nice group landing ~5" left of bullseye X. Repeating the same scenario on the right side of the front sight yielded the same results ~5" right.
Our brains/eyes are wired to naturally center the front post, and we train that way. With that understood, having a center-to-center spread of 10" at 10yds. is ideal given a potential high stress, life defending situation.
My point is this... yes, I want to be as perfect as possible at the range by taking my time, but real life won't be the same.