It is an interesting one and I have found myself gravitating to narrative based initiative for times when it makes narrative sense and otherwise just use the rules as is.
For example, if 2 sides spot each other at 150m and then start taking cover and firing then I'd just use the cards. Here it would not make sense for the person with a pistol to go first or get a bonus . Also, while rolling CUF at the beginning might make sense - eventually it's going to boil down to people missing turns when they start failing CUF rolls anyway and the initiative order effectively starts breaking up. One could argue that well seasoned soldiers should be able to react faster etc, but in this case this can perhaps be solved 80% of the time is they can instead have deemed to have surprised the enemy if it makes sense in the situation.
For situations where gunfights are tight and quick - especially on the first round or two - then why not just go full narrative - let the pistol guy go first if it's a matter of drawing a pistol and firing vs another guy who has to unsling and shoot a rifle in a confined room.
I don't think it's appropriate here for tw2k due to the nature of CUF rolls, but I've adopted a narrative style initiative system for many of my more "narrative" rpgs. I can't remember where it was originally from, but I think it was some super heroes rpg. Basically this is how it works. Everyone gets their one action in a turn. The first character to act is the one that makes narrative sense. The next to act is the one that this first character attacked / acted against (because it's more punchy and dynamic that way), unless there is a very good reason why it should be otherwise. If you go with otherwise then the first character gets to choose who goes next - which could be friend or foe. Repeat - and that's it. You get an interesting tradeoff between passing the next action to a friend vs a foe (noting that the GM get's to choose who goes next for foes). This wraps around to the next turn/round also - so if players pass the initiative order in turn 1 amongst themselves in order to "go first" then they set themselves up for the opponents to get 2 full sets of action (turn 1 and then again on turn 2) if they are not careful. However, I do not think this would work well for tw2k because CUF and getting suppressed are big deals.