Your math looks right to me... Lets look at it another way.
2000 steps per revolutioin of the motor
That makes it 4000 steps per revolution of the lead screw
Your lead screw is 5 tpi. so 5x4000steps = 20,000 steps per inch of movement
1inch divided by 20,000 = resolution of 0.00005
I think that is more resolution than you will need for a mill.
If you went to a 250 encoder you would have 1000 steps per revolution of motor and you will double your speed and still have 0.0001 resolution