Could 恭喜发财 sound inappropriate? I sent new year greetings to my Chinese teacher last week, writing "新年快乐! 恭喜发财!". When I saw her today she thanked me, but said I should never write 恭喜发财 to a teacher, because it's a greeting only people obsessed with money would use.

Is 恭喜发财 generally understood this way? Who could I / should I write or say 恭喜发财 to? Also, if it was indeed inappropriate, how bad was it? Did it just sound awkward, or was it worse?
恭喜发财 may not be the best greeting word from student to teacher, but it's not awkward - the intention is always good. 

For example, parents usually wish children with good health, striving and studying. If a parent greets children with wealth, you may find them funny, fashionable or friend-like, but definitely not mammonish or evil. 

In old Chinese traditions, there were strict rules about etiquette and word usage. A small misuse can be considered a big issue. But that time has long gone.

It might sound a little sarcastic if you say 恭喜发财 to someone who is obviously in an opposite situation, otherwise it should be fine to say it to anyone.