Yes - It was "intended" this way. However use has expanded way beyond foreseen expectations. Often the doctrine of use determines that accurate shooting (e.g. semi-auto) equates to better hit placement, less stray rounds and this tends to be a model used widely.
When it emerged, it was a closed bolt SMG almost a handy carbine capable of accurate shooting. Looking at its contemporaries of the day (Uzi, Sterling, MACs, PM12, etc.) subguns were capable of some accurate shooting but not like being able to shoot as precisely as a carbine. The tactics for SMGs were often holding at waste level and bursts (bullet hoses for suppressing volume of fire). Not really sure why the M2 Carbine wasn't well utilized in the SMG role after WW2, but I'm no expert either.
Enter in the MP5 with its ability to hit a target as easily as a 22 rifle placing accurate hits when you want it to and more controllable full auto fire. The natural advantage it had over its contemporaries was semi-auto accurate fire = shoot a guy in the head or other accurate-ish shooting at 50 yds. Can't do that with an open bolt sterling very easily. It can be done, but not as easily.