I don't think that it is necessarily limitations with LSP but more of a problem with the speed and ease of use.
Nutcrackers effects are created by selecting a model, type of effect desired and a few simple effect parameters and ta da you can see your effect right on your model and if you have lights hooked up have immediate visual results even before it's even added to a sequence. The learning curve for Nutcracker is fairly short. In Nutcracker the only reason that colors are referenced in the 'Single color Red/Blue/Green/White' model setup is for your visual reference on a model. It would clutter the selection menu if you had Yellow, Purple, Pink, Orange, and there would always be one color that was not in the list. You can always put in a request but right now I believe it would probably low on the list to add.
LSP requires either a complex series of layered settings, graphics, or videos to accomplish various effects. These effects can be previewed but only on a square area (not on the element it's self). In order to see an effect on an element requires a generation process that adds it to the sequence before it can be viewed in simulation mode. While you can certainly create some interesting effects it is a very timely process. The learning curve for the Macros is fairly complex and is one of the turnoffs to it's use.
I use LSP ver 2.8 and Light elf to export sequences for either importing into Nutcracker or for use with the Falcon Pi player. If you are having trouble with Light elf PM me and I'll try to help you.