Hmm, why not. Though most of the software do the right thing by checking if the standard output is an actual tty (isatty) to avoid colors when redirecting to something else (e.g. socket, fifo, etc). The name NO_COLOR suggests a really binary choice which may be okay. Though GNU coreutils usually have a more selective option like --color=always|auto|never. I'd prefer supporting a more general COLORS=on|off|compatible|…
Yeah, my first thought on seeing this was that I really want a way to force color just as easily; when I output diffs in CI, they're much more readable with color but it's a pain to enable it when running headless.