> preferring everything to be muted, gray or colored in black, off-white and earth tones
My nephew's plastic toys disagree, as do my sister-in-laws clothes. Also, Barbie.
[Edit] This was a bit tongue-in-cheek but I think the point stands. There is massive diversity about what colours and colour combinations are acceptable in different contexts and to different groups of people. I would agree that is currently a trend for grey furnishings in domestic contexts but society as a whole has never had a wider range of colours on show, I suspect, certainly if you consider all the new possibilities delivered by screens.
Yes, toys follow a different color palette. The acceptable colors for toys are white, black (only for rubber parts), the four colors red, yellow, green and blue in full saturation, as well as their pastel variants (baby pink, baby yellow, baby green, baby blue). If you justifiably need more colors you can even use all seven official "colors of the rainbow", as well as their pastel variants (side note: how many colors are in a rainbow, and which ones, is another great entry point to the history of color).
But even there tastes are shifting: saturated colors are now associated with cheap plastic (despite brightly colored toys far predating cheap plastic). If you want to signal quality you have to show natural wood grain (only light wood colors though) or gunmetal grey.
Re your edit about never showing a wide range of colors:
The range of colors has certainly increased. But we use the extreme colors in much more moderation, and even the use of colors overall is on a decreasing trend. Sure, there is still plenty of red, green and blue in energy drink cans. But on the other hand cars have lost all colors over the last couple decades. Home exteriors used to be painted in red or yellow tones in the 1930s but are predominantly white with black or gray accents now. Interior walls and furniture has become less colorful. And the counter-movements to making everything black and white make everything wood-colored and earth-toned, not colorful. And all of these examples are just about what happened in the timeframe from our grandparent's childhood until now. In the Middle Ages gaudy green chairs were fashionable.
I wonder if this is a real preference or kind of an economic distortion. I often hear that people would like a bright colored car, but they worry it wouldn't sell as easily, while a black car is unobjectionable and inoffensive to any buyer. maybe we value color but not as strongly as the opportunity costs?
or maybe it's just a temporary fashion change and we'll have a revival of bright pastel colors.
I question how many people seriously worry about resale value. What I see (especially after listening to a podcast on color preferences in cars) is that there are a lot of color patterns that aren't exactly classically neutral but are neutral-ish with maybe a tint of something more colorful. My brother's newish house is mostly so neutral with the exception of some artwork. I probably overdid room-by-room color schemes when I moved into my house few decades ago but I certainly wouldn't have opted for basically pure-neutral throughout.
Or is it that cars are now so expensive that you don't want appear to be showing off and so choose white and black cars that don't turn heads? Anti-conspicuous consumption?
My nephew's plastic toys disagree, as do my sister-in-laws clothes. Also, Barbie.
[Edit] This was a bit tongue-in-cheek but I think the point stands. There is massive diversity about what colours and colour combinations are acceptable in different contexts and to different groups of people. I would agree that is currently a trend for grey furnishings in domestic contexts but society as a whole has never had a wider range of colours on show, I suspect, certainly if you consider all the new possibilities delivered by screens.