Firing a MG at a trench is the reverse of its inteded trench line roll.
You really shouldn't be able to kill or wound much at all on a squad tactical level by firing at a trench line. That includes any direct firing weapon.
The reverse, however, is true. A MG fired out of a trench should do significant carnage on a relatively exposed group of targets.
The best way to deal with a trench, realistically, is indirect fire. Mortars, artillary, aerial bombardment. The only thing a MG should be for is to suppress any return fire from the trench line.
The MG was originally developed to mow down swaths of advancing infantry, not to destroy entrenched earthworks.
As far as ranges go, you're absolutley right. The average rifleman's effective range was 200m at most. Adjustable sights at the time ranged up to 2000m (depending on the weapon) but this was just to accomodate the range of the weapon itself. Most kills came even closer than 200m. Optics would be a very welcomed thing in ToW and would change the tank combat and AT gun abilities extremely.
Even the differences in iron sights made an impact, albeit too minor to simulate in ToW.
ASW is a little more realistic in this regard... The Germans were always outnumbered on every major front (other than Poland) strategically. However, on a tactical level, it wasn't until later in the war that they suffered a significant numerical inferiority at a tactical level, which ToW is inteded to represent.
In your Polish BAR scenario, your men were doomed without cover and indirect fire support. Realistically they would have withdrawn and awaited further support. Your squad would probably have had a 50mm mortar nearby as well, or maybe an 80mm if they were lucky.
LMG's didn't have the optics you mentioned either, if they were true squad level LMGs. They'd be lucky to have a tripod and most likely had only a bipod. You'd be lucky to hit anything at a trench line against anything but the most pathetic of foe.