The RGB LED is mostly there for esthetics. The goal is to match the color of the coverlay depending on which card is installed. Makes it a tad more entertaining I think 
Engineers have to be able to distinguish the essential/necessary parts of a question/task/problem from the unimportant parts - and then to ignore the unimportant parts.
Different coloured LEDs will be a good pedagogical technique for instilling those concepts[1].
In a similar vein, Professor Eric Laithwaite at Imperial College used to set exams where one question was easy and sufficient get you a pass mark, one was more challenging and couuld get you a good degree, and one could not be answered adequately in the time available.
He expected his undergraduate engineers to be able to determine which questions to avoid. If they couldn't, they wouldn't make good engineers anyway. I doubt he would be allowed to do that now, more's the pity.
[1] Arguably that applies to the whole concept of the project: the computer is an unnecessary complication. Zero999's point about using switches and LEDs is very valid, IMHO. I'll change my mind if I can understand how a computer enhances learning the logic comcepts.