The "demotion" of Pluto received a lot of press. After all, we all learned in school that there were nine planets, and it seems bizarre to have one of them cast out of the heavens. But in fact this is not the first time this redefinition has happened, and for similar reasons.
Classically, the Greeks thought there were seven planets: the Sun, the Moon, Mercury, Venus, Mars, Jupiter, and Saturn. Copernicus' heliocentrism dethroned the Sun and Moon but made the Earth into a planet, bringing the tally to six (the satellites of Jupiter were occasionally called "planets" but for the most part people settled on "satellites"). The discovery of Uranus brought it to seven, and in 1801 Ceres was found, in just the place Bode's rule predicted another planet. So eight planets it was.
Unfortunately, shortly thereafter, Pallas, Juno, and Vesta turned up, in just the same region. The idea that there could be four planets sharing pretty much the same orbit bothered people, but they still seemed like planets. So eleven it was, and stayed that way for a while. Neptune's discovery in 1846 added one to the total but didn't pose a problem.
But around 1850, a whole series of new bodies turned up, and it became clear that Ceres, Pallas, Juno, and Vesta were just the largest in a very large family of similar bodies. So they were demoted from planet status and called "minor planets" or "asteroids".
From there on you know the story: in 1930, Pluto was discovered and assumed to be large enough to perturb the orbit of Neptune, and so was labelled a planet. As time went on it became clear that Pluto was really rather small, but it was the discovery that there are many more trans-Neptunian objects just like Pluto that posed a problem with that classification. So the new category of "dwarf planet" was created, and Pluto was put in it, along with Ceres and a few recently-discovered trans-Neptunian objects.
Some people view this as a demotion of Pluto. I view it as an elevation of Ceres, and a reminder to look at the asteroids as interesting objects. After all, all those smaller bodies in the Solar System give us lots of information on its formation and early composition; the Murchison meteorite was full of fascinating organic compounds, shedding light on the origin of life on Earth. If you like to imagine a future for humans in space, the shallow gravity wells of asteroids mean they're relatively easy to visit and extract minerals from.