And yeah lots of fullscreen-ish things ran in lower color, but this is about desktop mode and I never saw a desktop mode that struggled based on color depth.
You'd need better than perfect vision to be able to make use of it, though.
It often wasn't a limitation of your monitor, it was a limitation of your video adapter. Rattling off some common specs of monitors isn't telling the full story of what most random people were actually experiencing.
I still remember having to upgrade our main home desktop at the time of Warcraft I I'd release because it didn't have enough video memory to meet the 8MB minimum needed. That was in 2002 on a machine purchased with XP, a Pentium 4 HT with 512MB of system memory. Not necessarily a low end machine, but obviously not a gaming PC at the time and much newer than many systems sold for Windows 98.