Here's the text:
Up Close and Deadly (Ex)
At 1st level, when the pistolero hits a target with a one-handed firearm that is not making a scatter shot, she can spend 1 grit point to deal 1d6 points of extra damage on a hit. If she misses with the attack, she grazes the target, dealing half the extra damage anyway. She must choose to spend the grit point before she makes the attack roll. This is precision damage and is not multiplied if the attack is a critical hit. This precision damage increases to 2d6 at 5th level, to 3d6 at 10th level, to 4d6 at 15th level, and to 5d6 at 20th level. This precision damage stacks with sneak attack and other forms of precision damage.
This deed replaces the deadeye deed.
I am considering houseruling that this must be within the weapon's first range increment. After all, it's called "Up Close and Deadly," and it seems strange that someone could roll a natural 1 and deal damage against a foe 100 feet away.
No limit per RAW.
If you feel like it needs a house rule, instead of limiting the range increasing the grit cost by 1/range increment would seem more in line with the class.
Edit: Well, there is the fact that the weapon itself is only allowed 5 increments if it's an early firearm, and 10 increments if advanced. So 100 feet is the maximum for early firearms and half of those actually would only go 50... I'd say that RAW works just fine and that IS pretty up close and personal for ranged combat.. (The only weapon that goes further than 100ft is the revolver at 200 ft. and that is an advanced firearm.
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Not sure what the problem is - firearms already have the limitation of not hitting touch AC outside of the first range increment; this one just deals a bit of extra damage, and it costs a grit point.
No projectile weapon acts in the way you're talking about, this is just like sneak attack on a ranged weapon.
It's an extra ~15 damage at 20th level, and you have to spend one of your (EXTREMELY) limited Grit points to do it.
Why does it need nerfing exactly?
I don't have much experience with the Gunslinger in play, and from some of the comments it sounds like there's a sentiment that the Gunslinger doesn't need to be weakened. I defer.
The Gunslinger, like most ranged martial classes, is pretty good, and some of its mechanics do have issues (many high level foes were not designed with Touch AC in mind) but overall it's pretty balanced.
Just my 2 cents on the class as a whole since you said you don't have much experience with it.
As a rule of thumb, anything that raises his damage by a small amount isn't a huge deal since damage is likely to be pretty low anyway (though advanced firearms can result in high damage through sheer multitude of attacks) and anything that raises to-hit is pretty much irrelevant since...well, Touch AC.