Why was LEGO reluctant to use additional colours for regular bricks in former times? Looking back to what LEGO offered in the 1980s and early 1990s (oh, those memories ...), it looks a lot like LEGO's colour palette had been limited to a small number of colours - unless I'm missing something, and just counting non-transparent colours now, mostly:


white
black
red
blue
yellow
light grey


But wait: A couple of other colours had been around for a long time, but had only been used for quite special elements for many years:


dark gray (some other castle accessories, such as minifig swords, at least since 1981 ... before the colour started getting slightly more widespread in actual buildings in the shape of BURPs, starting in 1993)
brown (some castle accessories, such as minifig spears or bows with arrows, at least since 1984 ... until LEGO finally started using some brown for trees instead of approximating them with black around 1993)
green (granted, this one appeared as plates in castle sets at least since 1984, but was otherwise mostly reserved to plant parts, baseplates, and special decorative elements such as flags ... until around 1992, when the fictional Octan gasoline brand was introduced and green started becoming a "mainstream" colour)


Now, I am aware I have not listed all the parts that ever came in the respective colours; my point is that, at least in my impression, these three colours listed above were mainly used for a rather small number of accessories or other specific elements for many years, as opposed to seeing widespread use as regular plates and bricks, compared to the other aforementioned colours.

Is there any known reason in terms of business/design decisions/the material used for each of the colours for this?
The answer I've heard the most (with a source citing the official confirmation) is that green, brown and gray bricks were omitted from the LEGO palette because the company wanted to discourage kids from building tanks, planes, and other realistic military hardware.