It seems that a unit may move and fire in the same turn. I find this poorly covered in the rules (or perhaps I am missing something somewhere.) It is mentioned under Movement Phase: General, and of course there is the -1 modifier in the hit table.
My interpretation of this would be that a unit can move its full movement and still fire, with only a small penalty.
Since a turn is 10 minutes, then a unit that has stood still and fired has possibly poured in as many as 40-50 volleys. ?A unit that has moved a full turn can fire, but with only a small deduction? When did they have the time to reload?
I know that the British and Prussians in particular had a policy of firing and moving, but not at full speed; in fact at a much reduced speed. They would spend 12 seconds or more reloading, take a few paces forward (3 seconds) and fire (2-3 seconds.) This could be very intimidating, but it slowed their rate of fire and was nowhere near moving at full speed.
I have been using a "house rule" that units may move a half move and fire with the -1 reduction. I still feel that this is very generous, and am considering restricting it to only certain troops and perhaps using a more reasonable distance like 4 cm. (However I am wavering on this last, as I feel that it will slow down the game.)
I considered changing the 'move and fire' process to your house rule myself during playtesting. I didn't adopt it in the end mainly because it made attacking just too difficult.
I personally don't see such a huge difference between moving and firing and firing stationary, at least over a 10 minute period. I doubt any unit would blast off 40-50 rounds in one 10 minute period - that's all their ammo gone, the muskets would probably have blown up and I doubt the men could manage to keep firing at that intensity and rate for more than a couple of minutes anyway. Three rounds a minute was pretty good going as a steady rate of fire, and IMHO even this rate would be unlikely to be kept up over 10 minutes except in the most dire situations.
In the end, my guide was usually reading battle descriptions, which brought me to the conclusion you see in the rules - firing whilst moving forward was done, and quite often done effectively.
In HoW, a -1 firing deduction is actually a significant reduction in capability, as I know from the many attacks I have made that have failed miserably.
As I always say, you are free to disagree, and your house rule seems very reasonable. I would give it a go and see how you get on.