...Yeah, it took some time to realize that the letter wasn't being translated for our benefit in the subtitles, and was indeed M (rather than E) in the original dialogue as well.
We have heard various attributes (atmosphere composition, surface temperature) associated with certain classification letters, but we have also witnessed contradictions. Class D is appropriate both for the lifeless, airless rock Regula of ST2:TwoK, the large, solid body Weytahn from ENT "Cease Fire", and the ringed, atmosphered planet of VOY "Emanations".
So I'd argue that any individual parameter, such as atmosphere composition or temperature, is irrelevant to the classification. What counts is the end result, the sum total of attributes: M is something you can colonize simply by pitching a tent, K is something that requires airtight domes, and L requires something in between.
D calls for extensive use of technology if one wants to remain there even temporarily - but the moving down the alphabet from M towards A may also denote the decreasing usefulness of the world to the settlers. That is, D, E and F are all impossible to live on unless you live in a bubble and wear a spacesuit when you go out, but F can at least be mined economically, E could be mined if one went to a lot of effort, and there's nothing to mine on D.
Why the scale would also have to go "up" from M, I don't know. Clearly, the higher letters of the alphabet again denote planets that cannot be easily inhabited, but it sounds redundant to have both A and Z to denote a planet maximally difficult to colonize. Perhaps A stands for planets that are impossible to live on but also worthless, whereas Z is for planets that are impossible to live on but full of treasures? That would allow for Y in "Demon", as it did have enriched deuterium for immediately useful starship fuel, and for gas giants J and T both (because the gases involved might be worthless or valuable).