Originally Posted by
Skies
Actually, and they have explained, the color of a piece of gear is actually directly tied to the gear itself. Instead of the game going "Okay, this a Toadskin Armguard. Now, what color is it? Pink? Okay paint it pink" instead it goes "Okay, what item is this? A Toadskin Armguard (Pink)? Alright, here's your Toadskin Armguard (Pink)".
Which means that to 'dye' a piece of gear a different color you are effectively crafting a new piece of gear, using the old one as material (so don't even try to dye your uncolored materia-melded gear, you WILL loose that materia).
Yes it is a failure of the system (which did not have dyes in the old days, even! To make stuff colored you needed a different set of mats, also the color of gear defined certain added abilities), however it is a failure that requires updating the game's graphic engine and the way gear is stored in it's database, what means that, essentially, it's a thing only 2.0 can fix