As well as a physiological handicap, "colour-blindness" is also the name of an often-proposed "solution" to racial discrimination in contemporary America.
It is understandable to assume that eliminating the ability to socially differentiate between races would end racial prejudice. However, one must realise that attaining equality among races cannot be solved so easily. Racial discrimination has firm roots in history, modern economics, and many different American subcultures. None of these could be realistically eliminated by colorblindness.
During the colonisation of Africa, there existed a strong sense among Europeans of what English poet Rudyard Kipling called the "white man's burden". This phenomenon was the idea that Europeans had a divine right to reconstruct African culture based on Christian aristocracy and/or European social standards. The European colonisation of Africa inevitably ended with the destruction of myriad elements of indigenous African culture. This grand anthropological casualty stemmed from the original belief that the lifestyle of European aristocracy was in some way superior to that of many different African peoples.
The similarities between the motivations and justification for colour-blindness are remarkably similar to those of the "white man's burden": they were both blinded to cultural and ethnic differences; and attempted to mend this gap of understanding by ignoring others' individuality. Because individuality is a bad thing, right? So let's not acknowledge it.
shaogo has pointed out my mistake of misinterpreting "a person's color as being part of their individuality." On a personal level, someone's ability to evaluate another's persona should have nothing to do with the colour of their skin. On a more political and economic level, however, I believe that color blindness may or may not be as effective, depending on the situation at hand. Kudos to shaogo for taking the time to correct me :)