Bashiok explains how and why they implemented the nerf.
While almost everyone agrees that it was not in the game's best interest to allow the ridiculously speedy leveling players were taking advantage of, the nerf at first seemed excessive. Whereas one could get 28K for winning a level 1 pet battle at level 60, this morning the same character got 900 to 2000. But as Bashiok describes above, the XP now scales appropriately according to level of the player and the pets in the battles.
I've been experimenting and I agree that they have succeeded in making pet battles slower than questing, but not a complete waste of time. If you are questing in a level appropriate area, taking time out to battle the wild pets in the same zone is definitely worth doing to add variety and experience to your endeavors.
Also, heirlooms, XP buffs, guild bonuses all still affect pet battle player XP, so do go take a ride on the Darkmoon Faire Carousel before you test the hotfix for yourself.
Did you take advantage of the insane leveling XP? I did only for a few levels. A grind's a grind, after all, and there are new islands to explore.
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