3% is a widely accepted figure for voltage drop but is not actually a code requirement.
If a motor is run on less than the optimum voltage then it will draw more amps, run hotter and probably have a reduced life.
A lot depends IMHO on the expected use of the well pump. If it is to run only briefly, on demand for household water then as much as 10% voltage drop might be acceptable, the reduced life might still be decades of normal use, and the wasted energy very little $
If however the pump is to run continually, perhaps for filling a reservoir or for crop irrigation, then I would be far more cautios as regards voltage drop and limit this to 3% at the very most.
Remember that a loss of 10% could be as much as 100 watts being paid for but achieving nothing useful. For a long hour load, this loss of 100 watts could be perhaps 800KWH a year, or from $80 a year. The reduction in energy waste would help pay for the larger cable.
The longer motor life might mean 5 yearly replacement instead of yearly.