SMGs are really for those for whom a rifle is not the best answer. In the case of those for whom space is the limitatation, such as tank crews and aviators, it's not a bad answer since the use is as a secondary weapon.
But where the SMG is REALLY useful is when a great many troops with no particular marssmanship ability or inclination need to be equipped, inexpensively and usually, in a hurry.
One such example of that was the 10 million or so Soviet PPSh burp guns used by the conscript troops riding aboard tanks during WWII; as few as one in ten carried a rifle.
Likewise, when Israel faced invasion by combined Arab armise that threatened to massacre all inhabitants of the State of Israel, the practical response by the Israelis was the development and manufacture of the Uzi SMG.
In terms of mass production and economy of scale, a pretty good SMG should cost far less than any handgun, being similar to an automobile bumper jack or a basic bicycle to manufacture and in required materials. And less than that of a lawn mower.
But legalities and taxation created scarcity, and scarcity raised demand, and as a result we now see rebuilt British Stens going for as much as $10,000 each.
"Thank You" for your service !!!
I reckon so long as ammo suppies can keep up, massive suppression/'spray' fire would be somewhat effective, esp, for gun crews and such who normally wont have a working perimeter or much time to organize when they NEED small arms...of course that works for populations that are rudely hit all of the sudden as well...