Sure enough every once in awhile a guy will come across a rifle that just won't shoot very well. It's not common these days with all the computer controlled machining, but back in the 70s and 80s it would happen quite a bit. a stock rifle back then that shot 2" was the norm. a 1" rifle was pretty special and a 3" rifle was still useable.
There might be some things that will fix it if you are clever enough and patient enough. But if the barrel was machined wrong, it's just not gonna work. Before I give up on it though I would check out everything about the scope and the rings and the bases. It's not good enough to just make sure everything is tight. Sometimes a very slight misalignment on the rings puts a torque on the scope tube and that can screw everything up.
But yeah, these days it is the norm to expect less than 1" groups from even cheap rifles. For some people it's not worth the frustration trying to figure out what is wrong with an under-performing rifle. If you're thinking about a new rifle, you've opened up Pandora's Box. So many good ones these days. For pure accuracy, you have to start with Savage bolt action rifles. They are hard to beat. But Tikka, Howa, Weatherby, Marlin all make some incredibly accurate rifles for real cheap prices. A few dollars more will buy you a Browning A bolt that is way pretty. Winchester and Remington still make some decent rifles too but they are not the accuracy kings.
But the real sweet choice if you go to a new rifle and are a reloader is the caliber choices these days. There is still nothing wrong with a 25-06 like you already have. Great cartridge. But if and only if you're a reloader, check out the 25 WSSM cartridge. And Weatherby seemed to saturate the market with cheap and good versions of their budget rifle chambered in .257 Weatherby Magnum. They are everywhere these days for not much money. If you want something tamer in 25 caliber there is always the 257 Roberts. Very good cartridge. Of course there's always the good ole .243. Works wonders on deer. Extremely easy to find a supremely accurate load with a 100 gr bullet. Seems like everything works making .243 rounds. I have a lot of rifles to pick from but if I know I'm only hunting deer that day, I will always pick up my .243. It's the only rifle I have that I will take a head shot on a deer that is sitting still. I know I can hit a given spot within a half inch of where I want to hit.
But if you go for a new rifle and you're a handloader don't overlook the old proven rounds. I happen to be a fan of the WSM cartridges but it's hard to beat the old favorites like .270 and .30-06. Which leads to the perfect recommendation for a great deer cartridge that you can easily get incredible groups with. Get a .308 rifle and start working up handloads for it. From 125 gr to 175 grain bullets it is hard to beat a .308 for accuracy and efficiency. A perfect deer rifle and easy to come up with great loads.
