Color Coins is going to overload the block chain and cause major problems with the core bitcoin features.
-bm
Interesting question.
If Colored Coins could choke Bitcoin it means the anybody can do such an attack regardless of Colored Coins. I think that's why we have the 540 Satoshi dust limit.
My understanding is that currently there is a 7 transaction per second limit on Bitcoin, that means if you send 5,000+ transactions in 10 minutes it would go beyond the limit. You can do 5,000 transactions for just 0.027 BTC.