Dutch_Grenadier screenshot is very surprising, to be honest. I've been taking out jeeps with MG at less than 100 meters...
Certainly, German machineguns aren't as overwhelming as I was expecting, with vanilla troops. Moreso if those troops are suppressed or under fire as others have pointed out. From what I have gathered from past discussions in BFC and GS forums, part of the problem is that MG's fire comes in "packets" or "bursts", probably because of limitations in the engine (try tracking 100's of bullets in flight, it's not that easy). So it seems BFC cut a few corners with the 1:1 modeling w.r.t. MG fires.
Nonetheless, while the above might impair the effectiveness of these weapons, by default, I've found out a few things which might be worth sharing.
On a battle I finished not too along - documented on a DAR on the GS CM forum - I played with two Kompanies of Fusilier Battalions... which means a lot of HMG's. I was careful to make sure all of these had Veteran crews with high motivation. And I don't have much reason to complain, to be honest.
And on the battle Bootie and me are playing right now - Sie Kommen Draw Poker - I wonder how happy Bootie is with those "ineffective" MG's

They're much more effective when firing from a higher elevation than the target. Be very wary of MG's perched on high places.
I really miss when playing the US, having a couple MG's in each squad. The amount of sheer firepower one can bring forward with the Germans in the assault is quite awesome. Cutting down a squad 300 meters away it's a bit hyperbolic - I'd say at about 100 meters and that surprising the advancing infantry so it can duck for cover in time. Surprising the TacAI like this also enhances effectiveness.