I think it was more to do with its orbit (eliptical and/or not in the same plane as the other planets as I recall??).
Both, really. When the "demotion" decision was announced, I was among the incensed sentimentalists. Researching the history, I was chagrined to find that the most annoying aspect of this decision was that it made so much sense. Tombaugh was looking for a much bigger planet, based on perturbation analysis, which was completely imaginary. The estimates of Pluto's size, which started out as "earth-sized", progressively diminished over the years. The sad fact is, it just isn't what it was thought to be.
... but still!