I always considered that phrase in Homer as a poetic flourish, or maybe just something that was a figure of speech in his time period.
The sculpture reconstructions you've linked are rather imaginative -- German grad students with UV lights, not chemical reconstructions -- and are probably only vaguely like the original colors. Where original colors have actually survived, in frescoes, etc., the ancients display a reasonable eye for beauty in color.
(I had seen that video before, it's very enlightening.)
And yet, the reconstructions there are reminiscent of Indian religious art today. Do Indians not have a reasonable eye for beauty in color?
I'd say it's a worthy phrase—to put it mildly—whether or not you know what blue is. I wouldn't count it as evidence that they were unfamiliar with the concept of blue.