As mentioned before, the pistol gets very powerfull when reaction triggering is considered. Simply put: Where you set one, maybe two reaction shots with the rifle, you can blast around four times with 100 % TUs, as it only takes 18% TUs. And one thing hasn't even been mentioned: It is not too unlikely, that you actually need more than one shot to down the opponent. That can make rifles less of a preferred weapon, especially in CQC. Most strongly, when the target is so close that you can simply run over and make it a sieve by the time it might react.
I dont quite understand your logic of pistol vs rifle at close range.
If your talking probability math, then within 6~7 squares (the expected distances you will find in houses and small scouts in the early game) Auto Shot Rifle surely wins out vs the Pistol Snap Shot.
You don't have access to a mind probe, so you dont know two key variables: 1.) the enemys remaining TUs 2.) its reaction stat
Say it hasnt moved and has around 60 reaction, i'll take the Rifle Auto Shot anyday of the week. Any action of 10+TU's would cause reaction fire by the sectoid in this instance and if thats the case i'll take the three shots with lower % chance to hit, than 1 snap shot at 50% with a chance of leaving the sectoid alive.
I cant see the merit for the Pistol in close quarters (if you disregard its ability to nail a sectoid with a single snap shot, leaving you ample chances to move to cover) but i can def see its merits on the open field.
And the difference between 3 TU's (the difference between having a grenade in hand and having it in your shoulder slot) just isnt enough to merit the Pistol in that regard.