At least 10 people on our server have made the orange draconic armor, and when they're in one place, it's difficult to tell any of them apart. I imagine people would like to dye their armor, to stand out more.

Nametags above their heads? Otherwise there are mods for changing armor appearance. Dying the armor wouldtake away from the iconic look and the DE orange :D

We do have nametags, but it's much quicker to identify somebody by their appearance

This would be really tricky to implement under the current models used for the armor. Nametags are there for a reason imo.