no need for senselessly unrealistically complicating things.
I think that Bullet drop is complicated. This would mean that the game would need to make the bullet a physical object, calculate the travel time, and calculate the drop amount.
As for bullet damage drop, it would only need to get the distance from the and plug it into a formula. And besides, damage drop isn't totally unrealistic. It's logical that at a distance, shotgun pellets would be rendered less-than-lethal.