This sounds like thinking inside of the box as for me. The "palette" isn't something we need if making a new game. Every "event" can have set "colors" (or textures in 3D) and even "sprites" (or models in 3D) separately, in the level file. Also, the player object, as same as other objects, could be affected by white and colorful light, so different effects can be achieved. So, a torch-holding survival horror, colorful crystal caves and glowing rivers of lava - everything would be possible.

Haha, a beautiful vision, sad that such a thing will never take place.