Ok I read the cult article. Two things popped out at me. One is plausible, the other, not so much.
Plausibly, it could be cool to see photos while standing in a line outside a nightclub, of what's going on (or not going on) inside. If you discover via Color that it's empty inside, you'll know you're part of a hype machine to make the club look bustling, and you can bail. In full disclosure, my nightclub days are pretty much over anyway. But this line of reasoning extends itself to myriad other places where what's inside could be of great interest to those outside.
Parts of Fortune's "trojan horse" article seems less likely. They claim the app will turn into a location based ad server once the user base is big enough, a la facebook. If you're walking your kids in a park, Color could show you an ad for a local toy store near the park. Ok, fair enough, that alone could be their business model. But the article goes on to detail an unlikely scenario…Color detects that you're wearing lots of North Face and serves up an ad for Marmot.
This might be how we get ads in 10 years, but I'm sorry, for now, the software to accurately and repeatedly detect a logo on a jacket in a blurry cell phone pic is not there yet. Any company worth their salt is not going to buy ad slots based on something so chancy and esoteric any time soon.
*EDIT* just read Color's
ToS and got a chuckle out of this, under the heading DO THE RIGHT THING...
"Don’t use our Service for commercial purposes."