Personally, I think it’s an interesting gimmick, but if I’m being honest I wouldn’t say that dealing with color actually limits my ability to think about other things when developing software/games.

Color does appeal to buyers, though. A B/W game system is doomed to a niche position.

It's made by a company that publishes niche games, in collaboration with a company that designs niche hardware. Finding an interested niche was the goal.

The PlayDate was intentionally designed to be a niche product, so that doesn't really seem to detract at all from the platform.

Why is a niche position bad? Panic's goal isn't to dominate the handheld games market.