They are solving the problem "we have a company and an app that was super hyped and we still have money to spend! And, uh, facebook"
The problem i have with something like his is that i really want a fantastic video streaming service, or the ability to post photos from my phone better (i have never been able to post a photo to G+ from the iphone app - it just hangs) and i will never have a Facebook account.
Color to me seems washed out. I cannot see them being anything too amazing because it is reliant on facebook and has this weird voyeur model.
It's more the Apple philosophy of "customers don't what they want till we show it to them", than solving a known problem. Personally I think it sounds like a probable hit.
Americans don't really take vacations. When I'm on vacation, the point is to get away from everyone... not live-stream my vacation back to them.
The closest I get to their use case is video chatting with family. This is odd. Keep pivoting.