I heard that Notch was trying to put reefs into the game (or not but whatever) and I thought it would be nice if when you broke them you got a piece of coral and 0-5 assorted dyes. The dyes could be used in a pot to change the color of wool or mixed to make paint.
=A pot. Would work like a furnace but instead of burning coal it would 'burn' dyes to change the color of wool.
  -We're going to pretend this mushroom is a dye.
  -I don't what would go here (paint needs a binding agent in it) so I put gunpowder.
  -Bucket filled with water.
The paint could have opacity slightly less than 100% so you could tell what material it was on.