So I'm clearly an open source software advocate, and speaking as one (and a business guy):

You are correct. If the community is distributing both the dots and the tools to create more on a third party platform, and then redistributing THOSE colorizations, yeah, it directly threatens their business model. Obviously ColorDMD would only speak up if they feel that their patents are being violated in some way. Enforceable internationally? Who knows with enough money and time, but I've found that it rarely has to get to that point. You catch way more bees with honey.

Its also worth noting that when you pay for a ColorDMD unit, you're paying the individuals that contribute hours to ColorDMD for the breadth of titles in their line up. This model sounds a bit familiar.

Randy isn't violating any open source licenses, He also found it easier to enter into a business agreement with PPS just to make things clear about game IP. So, in my book, he's an alright dude. So hey, talk to him, you never know how things might work out. If you disagree, then agree to disagree. He's not going to saw your hands off. If you work with him, you've already got a licensing conduit to work with PPS.

EDIT: Also, since OP has stated that he won't be sharing his colorizations, this point is really moot regarding him, but would still apply to others if they used similar tools to create and distribute color sets to others.