Not color, but format. Some newspapers will format a comic with two rows of panels, whereas another newspaper will format it with three narrower rows, etc. So the syndicates wanted comics with panel divisions that allowed that reformatting, whereas Watterson wanted to simply have his block of space to do whatever he wanted with.

He ended up winning that battle. But to hear him tell the tale (IIRC in the 10th anniversary collection), while it opened up creative possibilities, the toll it took on his psyche probably helped ensure the relative brevity of his career.