The two-hand hold presents its own set of problems.
The standard two-hand hold and front-sight focus can obscure a threat's actions. (Both demonstrators are using blue training guns.)
The best method of using a handgun for self defense can work against you. Here's a prime example: Most shooters are taught to use two hands to hold a handgun at eye level and acquire the sights. They are then taught to align said sights on the threat's center of mass as they fire or prepare to fire.
If the threat is close, within a few arms' lengths, holding the gun as described above blocks out your ability to see anything below the shoulders of the threat. Your gun, hands and arms cover or block out the remainder of the threat's body.
The problem then with the two-handed, arms-extended hold comes in those few seconds you have blocked your own view. That's when a threat has his opportunity.
Granted, if and when either you or the threat move, you will be able to see arms and hands and determine whether the threat is drawing a weapon or already has one in hand.
But, at best, average reaction time is .25 seconds, and that's only if the reacting person has foreknowledge of a stimuli and is prepared to react to it. Real world reaction time is longer because it must factor in observation and comprehension. It also involves making the decision to act; the use of lethal force is not something that is normally done without some judgment being applied.
The point is, you are already way behind the curve when you can see the threat. By blocking your view of his arms and hands with your own position, you are giving a threat a solid opportunity to harm you.
Those who compete in action-shooting competitions have had the misfortune of shooting a "no-shoot" target or two by accident. Often a pair of hands, painted or hung on the target, are used to identify a no-shoot target. If these are at waist level, the shooter will simply not see them as he moves from target to target with his gun in a two-handed, eye-level hold.
The reverse--where a gun or knife is used to indicate a shoot target--also holds true. If this cue is located at waist level, the weapons are often not seen.
In a real-life situation, this problem is much worse, for not everyone is so kind as to show you their weapon of choice at the beginning of the festivities. Coldly put, everyone in such a dynamic is a threat until proven otherwise. Age, sex, race and manner of dress are not determinants of guilt or innocence.
The answer for real-world application is, on its face, simple. When you draw the gun, keep it low enough that you can see the threat's hands. Doing so, however, runs contrary to how we are programmed for survival. We often instinctively throw our hands up if we think we are being attacked.
We also train to use our handgun in the most effective manner, which means using two hands and focusing on the front sight if at all possible.
Once we are so positioned, it is almost impossible to override this by doing the next logical action, which is, when not having cause to fire immediately, we lower the gun or pull it back in toward our body--in order to see more of the threat.
Both are correct, with the drawback that the threat can act before we can react.
The best answer is to always move when presenting your handgun. To me, it doesn't matter in what direction, but just about everyone will react by moving rearward to get away from a threat. Most trainers stress stepping to the right or left, getting off the line of attack.
Most folks will not do so, however, based on the simple reaction of most everyone who has a gun pointed at them by "accident," as might happen at a range. The "muzzlees" almost always back up quickly (and put their hands up, too), despite knowing a bullet arrives much faster than they can back up.
On this point, I happened to catch part of a film clip for a police reality TV show in which an officer--his arms extended and gun in a two-hand hold--has two offenders held at gunpoint next to their truck. One offender draws and fires a handgun he has concealed beneath his sweatshirt. He starts firing as the gun comes level and continues to do so as he brings the gun to arm's length, one-handed.
The officer's reaction to being repeatedly shot in his chest is to back up (and he does not fire). The two are never more than two arms' lengths apart. Both move out of view of the in-car dash camera while this occurs. The scene, illuminated by the officer's car lights, is in darkness and takes just a few seconds.
There's no one good answer to this problem, other than, as stated above, to move and do so as part of your reaction to the threat. If you need to hold a threat at gunpoint, do so with the gun held so that you can see the threat's hands. Pull the gun back in toward your chest or lower it only enough to accomplish this. Getting the gun back on him takes time--time you will not have. And keep moving.