It is standard to have the breech plug 1/2" long. As you have noticed, this almost never means 1/2" of full threads. Usually, with a 1/2" plug, you get about 3/8" of full threads and that is fine as long as the plug is fit properly. As your barrel is currently breeched, it probably has 1/2" of full threads because that is the modern standard. If you are uncomfortable with less threads and you can still put your fence within 1/8" of the breech, just leave well enough alone.
The problem I have is that I usually can't put the fence back to the breach even with a 1/2" plug. That is because if you use a 3/8" vent liner, your touch hole will be 3/16" in front of the breech plug face. Some people will put the liner into the breech plug. I will not as that impinges even more on that measly 3/8" of threads and provides even greater opportunities for corrosion to set in.
If you can get your fence within 1/8" of the breech without significantly shortening your breech plug, be happy with that. If you look at a lot of originals, you will notice, as Acer pointed out, the original makers didn't care much about the pan fence ending up against the breech. They didn't even care to fill the gap between the fence and the wood at the breech. At least I leave a little piece of wood there. The original builders would just chisel it all out the easiest/fastest way possible. Most of their customers didn't know any better or care.
Mark