Maybe not for a grownup, but it's disturbing and dark-ish for anyone, I think. Not a happy story. And it definitely targets younger readers. Would they find it scary? I don't know.
For a slightly more 'adult' take on this story, check out the graphic novel Gaiman adapted from this story. It's still meant for a sightly younger audience, but I think it's more effective and interesting than the book.
I keep meaning to read this but I watched the movie and I agree, I find it scary and disturbing. It was also really fun to watch and I quite liked it. But...it's made me look at rag dolls with button eyes in a very different light then I used to.