There is a noticable gap between 2nd and 3rd gears, but the gap is acceptable, IMO. Shortening 3rd gear would reduce drivability a bit and cause us to shift even sooner. Most RPM loss between shifts is around 1000rpm in just about every gear, while upshifting to 3rd gear is around 1200rpm. So, shifting at 5000rpm in 2nd gear will yield around 3800rpm in 3rd gear. I just rev higher to compensate.
I believe that, although the S54's gearset could use a little fine tuning, it's as good as it gets short of a 6 speed. It does its job better on the higher powered 3SGE, but is acceptable on the 5S.