The main benefit of a color eReader is for (some) PDFs, comics, etc., all of which benefit hugely from a larger screen than the Libra's 7" display. I hoped Kobo's first color reader would be at least 8", and preferably 10.3". Carrying all my RPG PDFs on a color eInk display would be super cool, as I find reading on such a device much easier on my eyes than an iPad.
I think the argument for color is much weaker on a book-sized reader. You get the library and sleep screens (which are admittedly cool to have in color!), but the rest of your usage will mostly not benefit. Kobo's PDF software isn't great, though there are third-party readers you can install that improve the experience. No matter how good those are, though, they still benefit greatly from a larger display.
Presumably, this is just the first step. IIUC, the Libra 2 is their most popular reader, so I suppose it makes sense. Just a bit disappointing.