I believe size shouldn't matter, as long as PHP/MySQL limits aren't hit, it should just take it, auto resize it and use it as it desires per usergroup settings. It shouldn't be the problem of the end user that they have 120 or 200 in size. Or 30kbyte or 10kbyte.
I've tweaked the wording of this. The issue was the maximum file size. If you avatar is within the allowed dimensions, it's not resized/resampled. This is then checked against the max file size (which is 30KB) and thus was rejected. I've added mention of this to the error message.