Well, that is an informative error message. NOT.
I'm pretty sure it's recipient count that is kicking it back. If you send a message to fewer people - maybe 5 or 10 - does it bounce?
I guess you can thank Google for that informative error message. I don't know what the breakoff number would be, but, yes, an e-mail sent to a much smaller number of recipients will go through. I've been sending e-mails to this group since 1995, mostly via Outlook, and have only started having problems with it roughly eight months ago and just now. The number of recipients has changed over the years, but I doubt it's ever been any lower than 50. I've been using Outlook in conjunction with Gmail for eight or nine years now.
Right now, I'm using a workaround. Instead of having the sender indicated as my Gmail address, I'm using my Hotmail account. I then enter my Gmail address as the recipient in the form of "Undisclosed Recipients" and then I bcc the people in the group box. I would very much prefer to use Gmail instead of Hotmail as the originating e-mail address.