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My experience shopping around a number of MUDs has been that there is no correlation between the amount of color and the quality of the writing, and there might be an anti-correlation.
If the text is fast-paced (often involving a focus on PvP, PvE combat, etc.), color is best used as an uncommon and well-chosen highlight-- if all the text is heavily colored, it becomes hard to pick out critical events.
If the text is slow-paced, where you can sit back and read it, the narrative shouldn't need a lot of color. As an analogy, if I was in a bookstore and picked up a book with lots of colored words in every paragraph, I would assume I was in the children's section. Some color is nice (separating out different forms of communication, highlighting key details like exits or other mapping helpers, etc.), but an excess is probably a sign that someone is putting their effort into flash instead of depth.
Color is very easy to add to a MUD-- most stock codebases and clients support it, and adding the code to make it appear in a given section of text is usually a trivial modification. Thus, I wouldn't interpret the presence or absence of color as a sign of coder skill, either.
If color is what floats your boat, of course, you can make a decision based on that. My personal opinion is that you might be assigning it a value that isn't necessarily accurate, based on what you wrote.
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