If he went from 5 foot groups to 5-6" groups at 25 yards, it's unlikely the gun. I'm happy with 2-3" groups at 13 yards so that's about the same accuracy. Compared with my 1911, the M&P40 is much lighter and will kick/flip/recoil a lot more. Many times, I would put the first bullet right in the center of the bullseye and by the end of the mag be all over the place.
Your light load is a good find. I've found a load of 3.0 grains of Clays under a cast Lee 401-175-TC to have a recoil somewhere between a light 38 special and a 22lr. Most of the motion is from the slide moving back and forth. I can get 1" groups with that load and it is really good for trigger control.
If I were you, I'd keep shooting those light loads of Titegroup and see if your shooting improves over time. If it does, you can keep plinking with those loads or move up. I did the same thing with my 1911 (started light and moved up) and found out that the early poor shooting was the shooter and not the gun. I'm finding out that the same thing happened to my M&P40, although it has taken quite a few more shots to get as accurate and I'm not quite there yet.