My mid-1990s Graphtec plotter has a precision of .01mm, or 2540dpi. I don't have any pens for it fine enough for that to matter though, and have yet to build a generic pen-holder (it grabs the pen with magnets...).
Yes, that is the issue. The finest pen you could likely get would be 0.1mm (and even that would be hard to find and expensive). That is what I based the 250 dpi on.