I don't think coloured coins are a good idea. I have no problem with alternate, niche block chains. If they fill a valid niche, they will not die out. That, and failed experiments don't have to be stored forever in the Bitcoin block-chain (as would be the case with your coloured coin proposal).
The interesting thing about building on top of the bitcoin protocol is that it doesn't really matter if it is a good idea or not - there's really no way to prevent it from happening. Therefore, it
will happen if someone is willing to pay the tiny price of having their experiment encoded in the bitcoin block chain.
Also, my paper is not about colored coins, although the same arguments apply.