the thing is, can't you overlay a different sprite on a three-color sprite for the extra color on the gameboy?
Oh absolutley... you can indeed - however; in context this would be extremely wasteful when you're dealing with a limited character set for your sprites... One wouldn't waste valuable space on that extra shade when you could have an extra frame in your animation or a new baddy (for example) - I think you'll find if you look at 99.9% of all sprites in a DMG GB title they will be 3 colors only...
...at the end of the day it's purely academic, and I for one don't want to take anything away from everyone's sterling efforts...
I just think it's a valuable thing to understand that it's actually a little more tricky than it first appears... and there's a reason a lot of the old GB games looked the way they did. Limited color, limited characters, limited memory... which, after all is what IMO pixeling is about... making the most of those limitations.