This is not the case. Color had a very talented team attempting to attack multiple technically challenging problems, that remain unsolved today.
The first is the discovery of your implicit social network, as defined by your virtual and real-world interactions with others. Facebook currently uses this to determine what information is shown in your News Feed and make friend recommendations, but is not using it to its potential. Google Buzz tried to do this directly via your emails and flopped partly since it did not account for the privacy implications. The ability to transform people's natural interactions into strong recommendations of what they should pay attention to and who should meet each other is still an open problem.
The second is the mapping of real-world events (initially defined by the pictures and people) onto the virtual world. There is potentially a lot of value, both to participants and outsiders, to say (1) who came to real world events, (2) how they interacted, and (3) what happened, while properly dealing with the corresponding ethical implications.
For both of these to work, Color needed a viral social product to gain data and users. They failed on product/market side, especially because they did not have enough focus on "what is the experience we want our users to have the first time they launch the application?" The opportunity remains open, for Color to redeem itself, for the big players to improve their products, or for a new startup to come along and show the world how it's done.