There is now concrete information on what is going to happen to the Armor Color Matching system. Some may be happy while others will still be mad.
The full post is written by Emmanuel Lusinchi on the main SW:TOR site fourms. The reason it was taken out was due to design issues of the items. One can only design a boot so much without using colors to distinguish said boot from others. This meant that getting a new boot was not as good because it would look like any other boot with the Color Match System.
The system was removed to solve this issue, but it is not scrapped. There will be further testing and tweaking of the system. This means that it will not be in launch, but Color Matching may be in a patch post-launch. So, do not fret Color Matching lovers, you just have to wait a bit longer post-launch to get your beloved system.