I am a new parent, and may well be eating my words in a few years time, but I have always felt that kids should get to choose their own colours within reason. I can offer a few guidelines and useful phrases for directing their final choice (they almost always want electric lime green), but for the price of a gallon of paint, it's a great way to let kids explore their creativity, and to give them a sense of ownership over their little corner of the planet.
When they choose that saturated canary yellow, or vibrating lime green, I like to tell them that it will be awesome for about a week, but the novelty will wear out quickly, and those particular shades can end up make you feel a bit sick when you're surrounded by them for too long.
If they choose a dark colour, I recommend that you give it some serious thought. Strong colours can make you feel contained in a space, which can be very comforting, and they can offset white or wood furniture beautifully.
If the offending colour selection just doesn't flow with your decor or your personal taste, see if you can get past it. Like everything else with kids, this too shall pass, and it's better that are allowed princess pink at 5 so they won't explore for the first time at 25. There's no faster or cheaper way to totally transform a space than to paint it, so I say let them choose. And if all else fails, have it made in a 1/2 strength colour formula, and call it a compromise!
