I can understand that, and don't think that they should want to have to redo the stuff. Neither is it unreasonable to consider keeping Red/Blue/Yellow/White as default colors due to the precedents. But, in addition to personally preferring classic colors (especially when thinking about designing levels), but seeing also that others might want to choose other colors for custom design purposes or even as a clan standard (like a shirt for a football team), getting rid of the arbitrary hardcoded colors for a system similar to the one for each player would not harm anything while it would make sense.
In addition to a default, settings like this one could be settable through the wad (in a file similar to ZDoom's MapInfo or to MBF's Options lumps), and/or through the server CFG. The Odamex wad would simply have two flag sprites, standing and carried, both green, and recolored according to the chosen team colors.
Also team names; I'd stick to R/B/Y/W if the default colors are set, Team 1, 2, 3, and 4 if nothing is set, and a custom name if all the players in the team share a team name, or if the name of each of the four teams is set on the server. This would enhance teamplay and CTF giving the chance for the teams to have proper (clan or whatever) names, which if not always stupidly end up in the user name, cluttering it and causing annoyances when people change teams. Instead of that it could optionally appear along with the user name (if something like show_teamname is set to 1).