Color does not slow down the framerate, what it does is show flaws in the lighting system.
Think of it like this. If you have a piece of neon green paper and you hold it near a window you can see the green light reflected onto your hand (or anythign else around it). This is really difficult to do with lighting in a game, and without these little subtleties the light engine can look awful. So if a dev makes a game that is mostly neutral colors like gray and brown, they dont need their lighting engine to be as precise because you are only reflecting white light anyway.
If you have a good lighting engine, more color can slow it down. Mario Galaxy doesnt have a very advanced lighting engine so it doesnt get affected byt the large amount of color.
You can make a game look better by making it monotone simply because you wont notice that colors arent being reflected properly. Gears has a great looking lighting system, but if you added as much color as something like SMG2 you'd notice that it looks really awful, or it would run much slower.
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