Ironically, I suspect the reason is exactly the opposite: that colour is now essentially free compared to grey/muted. I certainly don't think people are buying grey carpets, on balance, because it's cheaper.
It used to be that it was difficult to colour things significantly. In the long distant past, you can think of "royal purple" being so expensive that only the real elite have access to it. In early 20th century, that's no longer exactly the case but still I would expect colour fabric is somewhat expensive, so it's still the preserve of a richer class. When it become accessible in the mid 20th century, it becomes popular as people still think of it as being more premium. Finally, another generation comes along that doesn't think of deep colour as being a premium product (because everyone has it) and either rebels or just evaluates it on its actual merit.
None of the above is backed with any actual evidence. But that's certainly how elite clothing has progressed i.e. why world leaders wear grey suits today instead of elaborate coloured gowns.