My guess is, they use flat color tiles or dithered tiles because they're faster to draw than textured tiles. For flat tiles, pixels are just set to a given color, whereas for textured tiles, we have to copy all the 256 pixels from RAM to video memory, wich takes longer. And this really matters for a scroller. At least, it's how it used to work in DOS. Seems to be same in the C64. Note that the trees may use flat tiles too.
Despite the speed issue, the game's rather slow in my computer (AMD 1.1)! Is it because the XP is emulating the DOS mode ? Other than that, excellent game (behind Gods off course).