The description of the skill states that the range is 9 yards. You can tun on Advanced Tooltips in the gameplay options if you do not see the range in the skill description in your game. If you are not sure how large 9Y is, see the image below for reference.
https://i.stack.imgur.com/IKkOB.jpg
The stone blocks around the teleport pad in Tristram is 10 Yards, so Demolition has a smaller radius than that.
That is why it is only firing in the general direction of your mouse and not reaching your enemies, because you have to be almost within melee range.
This is not a bug, and you are missing out on a 600% damage multiplier by not using Hungering Arrow.
If you want to make suggestions about adding new items to buff other skills, or that the range on Demolition should be increased, then this is not the forum to make suggestions.
Please see: How to Write a Good Bug Report
- Feedback is NOT a bug* . Anything related to feedback, class balance, boss suggestions, etc. belongs in another forum.