My thoughts on the subject is that I think the people defending this are making excuses. The point of setting games in differant eras is to sort of vicariously experience the warfare of that era. Talking about how the guns would have less killing power is arguably the point, as it draws a differance between those firearms and improvements that came later. If someone is going to make a game set decades ago as a selling point, then they should at least make the game authentic to what was used at that time.
What's more, given the general ignorance of some people I've talked to when it comes to hardware and military matter (and I'm hardly an expert) I will say that games like this could provide education of a sort, in addition to just being fun.
Let me give you an example of sorts, even though it has a basis in another era. When you see people holding guns sideways, what is the first thing that comes to mind? For the vast majority of you that is "shooting gangsta", heck with crime games that's something a lot of people want to do. For a few people you recognize the sheer idiocy of holding a gun that way, and how your asking for a weapon jam or something.
How did it start though, why would someone ever conceive of holding a gun that way, other than to show off thier general lack of intelligence?
Well, the answer is that this is holding a gun "Chinese Style", back during the big Communist takeover in: 1949 http://en.wikipedia.org/wiki/Chinese_Revolution
Now one thing you will notice there is that the Commies were getting their guns from the Russians. We'll ignore the whole "limited aid" bit because both the US and USSR were up to their knees in that one (it is Wikipedia after all). One of the things about automatic Russian pistols of the time was that they were using an unusual mechanism to eject
casings from the side of the gun rather than straight up. Holding the gun normally gave you
a pretty good chance of the gun jamming, but holding the gun sideways put gravity on your side and gave you far less chance of the gun jamming. Thus the Chinese troops of the time were holding their guns sideways. It's "shooting Chinese Style" because this method of doing things was obviously problematic and scrapped, the Chinese in that conflict being the only major force to ever do that on a large scale.
From my reading your typical commie soldier in that conflict was pretty might fighting based on numbers. They were typically armed with one of those Machine Pistols, and large broad bladed swords called "Willow Leaf Sabers" which were traditionally used as the weapon of an executioner. As the rebellion was based on numbers they did some wacky things like march their mile a day without wearing shirts or shoes due to their "poverty from oppression" and that style of sword was seen as the oppressed turning the weapon of their oppressors against them. I'm not an expert on the conflict, but this is how I learned about parts of it.
I am not a munitions expert, but I believe The Chinese did manufacture a number of pistols with similar ejection methods for years afterwards, but I do not believe any are currently produced, and the Chinese now fire their handguns normally.
At any rate, "Gangstas", especially fairly early ones wanted some distinctively non-white way of shooting for racial reasons. The sideways style of holding a gun was adapted, even if most never understood why people would hold a gun that way, leading to some of the most idiotic handling of firearms ever. I think it's become less common for that reason, but you've probably heard people say "WTF" and explain why holding a gun that way is stupid without the historical explanation of where it was being copied from (probably via movies).
The point of this long rant is that there are all kinds of cool things to be learned about conflicts and time periods by looking at the weapons used. Treyarch deciding to do something like this is really kind of lazy. If they wanted to do something like that, why set a game in this time period to begin with? Half the point should be to give it a differant "feel" with weapons that aren't quite as effective as they are now. Sort of like how in a Napoleanic wars game, Firearms should be considered destructive, but relatively unreliable, with players wanting to put as much (or more) faith in their Bayonet (and maybe sword) as they do in their bullets and the few shots they are liable to actually get in a given mission.