I think that one key factor with this small of a shoulder cut for pulled pork may have been overlooked...TIME. Time for melting those connective tissues during the smoke/cooking. 225* is considered low & slow, but with that small of a cut at under 2lbs, 225* may not be low & slow enough. That chamber temp may be quite a bit too high for a small cut, and if you use that temp throughout the smoke, there just may not be enough time to allow for the connective tissues to melt, the fat to render out, etc. With smaller candidates for pullong, I have often used a minimum chamber temp of 225* only for start-up, to pasteurize the surface for 45-60 minutes, then cut the chamber temp back to closer to 200* and let it ride until I/T is close to 170-175*. This allows I/T to rise more slowly through the 150-170* range, translating to more melting of collagen and rendering of fat. To do so with a boneless shoulder cut, one must still consider the 40-140*/4hr rule, but other than that, I it will yield a more tender pork for pulling.
In regards to the picnic vs butt, I actually prefer the picnic...just can't find them very often around here, or they would be my first PP choice. It has been my experience that it is easier to pull picnics in most cases, likely due to heavier deposits of collagen, and they have much more of that deeper flavor from the collagen and higher amounts of the darker meat than compared to the butt. With every picnic I smoke, I seem to find less fat deposits remaining in comparison to the butt, and the only real difference seems to be more bone with the picnic than the butt, although I don't see this as a draw-back at all...bone comes out easily with little to no picking through the meat for veins, tendons and ligaments. The other noticeable difference is that the picnic has longer muscle groups, as they aren't cut mid-muscle like the butt...if that's an issue, just cut the muscle down a bit before pulling...I never do.
Definitely a big YES to bone-in pork for pulling...it's a built-in gauge for doneness and will never fail you. The bone is also am any easy to read gauge for meat shrinkage, indicating the progress of cooking mid-smoke. Temps for monitoring overall progress and the indication of stalls, but a bone-tug will tell you the rest of the story. The only hurdle to overcome with a bone-tug is if you're going after a super-heavy, hard bark, as I do...gotta break the bark from the bone before it will really want to move at all...again, not a draw-back, but instead just a simple issue to overcome which also indicates that, yes, you got a great bark on that pork...pat yourself on the back!!!