They intentionally did the bad coloring because Game Boy screens used to be so dark that washed-out colors looked normal, while "correct" colors would be very dark. Looks bad on a computer screen because of that.
Ever see one of those GBA games that came out during the SP transition? A lot of them had an option to make the colors washed out or not, depending on your system (or use of GB Player).
Now that, for instance, my DS Lite screen is brighter than my monitor (who would have ever imagined!), this is no longer neccessary.