Dot pitch means different things between CRT and LCD. In CRT terms, it is the distance between phosphor dots/bands of the same colour - yes, smaller is better. Ideally you wanted a pixel to cover multiple phosphors so that it was more even in brightness (push a CRT too far, and you might have different pixels with different numbers of phosphor dots, so different brightness - looked nasty). On LCDs, dot pitch is the distance between pixels (assuming you are running the LCD at its "native" resolution). So the question of "is smaller better" is asking a different question, and has a different answer - I would say "sometimes" - sometimes smaller is better, if it means a higher resolution LCD panel.
When we could only use CRTs, those of us who cared used good CRTs. I was using a professional 17" CRT when the common size was 14". CAD CRTs were awesome beasts we worshipped from afar (CAD users had 21" CRTs when I had 17").
It only makes sense to use good LCD panels, too. That means that those who say "oh, no, all LCDs are lousy compared to my expensive CRT" are guilty of comparing two unequal things (I refuse to mention apples for fear of starting the whole "are Apple Cinema Displays good for photographic work?" debate again). Do not judge LCD panels on the basis of a panel that costs $100 at Best Buy!
A professional LCD panel is at least the equal of a CRT today, and has several advantages (lower power, lighter weight, less bulk, greater stability, no electromagnetic field, no vulnerability to magnets, ...). However, I think the question is becoming moot, because professional CRTs are vanishing.
Again, looking at a laptop LCD panel is a whole different thing from a professional LCD panel - that's like saying that hi-def TV is no good by looking at a portable TV.
Before you write off LCD panels for photographic work, have a look at a properly calibrated Eizo CG210 - it is very good, but rather expensive. So were professional CRTs...