I think leave the engineer's stats as they are but give him some slightly different special rules. Roughly the same pts too.
Can you imagine actually facing a BS5 helblaster? Average 16-18 shots per turn hitting large targets on 2+ at long range? ( assuming 18, thats 15 hits )
I think the best way to get around this is like smashthedean said and make it so that he can have more accurate weapons. ( he'd keep the better quality / more precise tools for himself wouldn't he? ) Make it so that for 5 pts he gets +1 to hit with any missile weapon thats not artillery.
For special rules i think it'd be cool if there were things like:
Cannons / Mortars within 6 inches of him get to re-roll one artillery dice ( as if he was with them currently )
Armywise it might be interesting it he made a unit of outriders core, or maybe make it so that you can have 0-1 set of 2 cannons / mortars that count as one special choice. That'd free up some a special slot for things that aren't artillery
It'd also be cool if they made it so that if you had an engineer, you could get some of the more outlandish stuff as rare choices. The book mentions "Hugon's Terror Bell" and a "Thunder Barrel"
Finally make it so that there was a small list of engineer specific weapons for extra cost, i.e. more random stuff that only he really knows how it works. Or perhaps make it so that 0-1 unit of handgunners gets more accurate weapons for x pts per model? People have suggested chain cannonballs, to simplify it, how about that it can hit 2 per rank rather than just 1? How about Chain Mortars using the normal guess but S4, small template and that fire 3 shots that from original position? There must be loads of ideas out there?