There are a few different parameters governing effectiveness of a weapon, as well as effectiveness of a person in combat situations.
Pistols (compared to other firearms, as well as other larger weapons like swords) favor compactness, mobility, and concealability, usually at the expense of firepower. Not so in this case: your nuclear pistol is effectively the ultimate in raw offensive power. But sheer damage output is not everything. While the pistol can be concealed, its use is anything but inconspicuous, restricting it to either first/preemptive-strike or open combat scenarios. Further, its blast radius means that its use is likely not appropriate if your target is anywhere near anything you care about. Still, it's hard to argue with raw damage, and it remains an "ultimate weapon."
But damage output isn't the only thing on the battlefield. Mobility, defense, information, stealth, utility, precision. These are just some of the factors you can work with to ensure that your "ultimate weapon" is not the final word on the battlefield, or at least has some competition.
Disclaimer: I don't know much about the world you're creating, so the following suggestions may very well not work within it.
Mobility: Must all weapons be restricted to the object in the hand? Perhaps some piece of technology these peacekeepers have improves their speed or reactions on the battlefield, making them nearly impossible to surround/pin down/hit at all. Your nuke pistol isn't such an attractive prospect if the enemy is already on top of you, but the ability to outmaneuver your opponent or perform a tactical retreat safely is almost always invaluable.
Defense: Regardless of whether defensive measures are effective against nuke pistols, their use against the greater population could be quite impressive on its own. Appearing or being invincible against conventional weapons could be more useful than the nuke pistol in many situations, especially against a wily opponent likely to try to take advantage of the nuke's limitations. A good shield or armor will save your life, whereas the pistol is purely an offensive tool.
Information/stealth: All the firepower in the world will do you no good if you don't know where to point it. Conversely, one guy with a knife or gun who gets the drop on you can end your life just as well as a nuke. Presuming Fallout as a technology base, stealth fields already exist.
Utility: Nukes are worse than useless at close range. Or against targets that you want to remove without damaging anything nearby. Or in places that you don't want to leave irradiated. Or against targets that you want to damage/wound/incapacitate but not necessarily kill. In these senses, nearly any weapon would be superior.
Precision: A pistol is hard to aim at a distance. Ranges of multiple miles are not unheard of in modern-day combat and, while the pistol is capable of firing that far, it's going to be exceedingly difficult to win a gunfight at that kind of range against someone with a proper sniping weapon.
There are also considerations of ammo limitations, recoil, and reloading/time between shots.