This is mostly incorrect. A close range Conscripts have 3.4 DPS per model and Grens have 5.9 DPS per model. A Gren squad at point blank range loses to a Con squad because the Con squad has better survability with 6 men, not because the conscript squad has better DPS. When Cons are upgraded with PPSH and thus have 9.6 DPS at close range they can lose several more models in closing and still win be it at Vet 0 or Vet 3.
The big issue becomes when later on in the game you are dealing with squad wipes from explosives as Ostheer because of your smaller squad sizes, AND now you have to deal with the fact your squads are also more fragile to small arms.
I decided to run some tests on it to ensure my thesis is correct, results were quite informative!
-At vet 3 a riflemen squad with 1 BAR can charge across a field at max range and win against a Vet 3 LMG Gren squad with a reliability of 68.4%, additional BAR's or a flamethrower or 1919's brings this up to 93.4% (well adding them all together 1919 Rifles don't need to close to beat Grens)
-At vet 3 a riflemen squad with no upgrades can close from max range and beat a Vet 5 Volks squad with no upgrades 1 on 1 with 97.5% (only had the riflemen lose once due to insane RNG )
-Addition of upgrades to Vet 3 Riflemen give them basically a 100% chance of beating Vet 5 Volks even at mid to far range.
-A vet 3 conscript squad with no upgrades can close from max to close against Vet 3 LMG Grens and win 49.2% of the time (wins were often insanely close, with 1 member always being left on each side with almost no health left)
-A vet 3 PPSH Conscript squad can close from max to close against Vet 3 LMG Grens and win 68.87% of the time.
-A vet 3 conscript squad with no upgrades can close from max to close against Vet 5 Volks with no upgrades and win 62% of the time. RNG jesus holds a lot of say here.
-A vet 3 conscript squad with PPSH's can close from max to close against Vet 5 volks with no upgrades and win 83% of the time. RNG matters a lot less with the more accurate and less RNG dependent PPSH's.
Conclusion: Hard to really say that LMG Gren's are just "A-move to win" when almost every Vet 3 Allied equivalent squad can literally run up to them and win with often 60%+ reliability
I'd say the conclusion is: Inconclusive, because you'd need to run these tests a lot more times than you probably ran them to get close to the right numbers. Also, you're only testing this one specific 1v1 combat scenario, which doesn't really asses the value of each squad completely, since there are any other scenarios in which units would engage each other.
It doesn't really address the point of the OP, which is, should grenadiers get another model while keeping their current DPS, to increase their survivability against explosives/tank shells?