I'd agree. It's using a sledgehammer to crack a nut. You already have two technologies that can perform the colour calculation fairly simply: SQL or SSRS. Doesn't need another. On the other hand, it is a good example for integrating a C# assembly into SSRS where required.

Just wondering, because I couldn't figure it out, does the additional assembly set on the reporting server, or does it need to be deployed to the client machines? Hopefully the former.