I don't think the [Color] Out improves the gameday atmosphere or the homefield advantage significantly - and that's not necessarily the purpose. Sure, a player looking up at the stands may better be able to see the unified support from home fans, but that could also backfire if more of the visiting team's fans show up than the home team's (*cough* Baylor *cough*). It's a novelty to those in the stadium, at best. It's more for the outside world to see.
One thing it does is to give you that iconic stadium photo that can be used for marketing the football program to fans and recruits. It makes a statement that you have a serious football program and your stadium is a great place to play. No recruit or prospective fan is wowed by empty seats and fans that can't even wear the team's colors (*cough* Baylor *cough*).
- versus -
The other thing it does is build a buzz around town. 50,000 Gopher fans headed to the game on Saturday (or even wearing their colors to watch the game from home or the bar) are going to be going out to eat, walking around town, getting their oil changed, and a million other things. I'm sure you know when the Vikings are playing without looking at a schedule because you will see a sea of purple shirts in bars and restaurants. By getting every Gopher fan to wear their colors on Saturday, people in town will begin to take notice. Having people show up in whatever t-shirt happened to be at the top of their drawer doesn't help advertise the team (I'm not even going to be subtle anymore, this is Baylor).
Now, I'll admit that colored shirts are just about the last thing from being unique. However, I do think it falls under the category of creativity because you are looking for a solution to raise awareness and the profile of your football team, and a town full of $5 maroon shirts sure could help that more than any badly-drawn billboard.
It's also an easy first step to unifying the fanbase. If you can tackle coordinating shirts, you can move on to bigger projects such as improving tailgating, new cheers or traditions, or any of the other things people here are wanting to improve.
Besides, which looks cooler (5 second photoshop, sorry for the quality):
- versus -