Not sure on the feasibility of coloured e-ink, I've not heard anything about it, it's possibly it's not something they can do.
10 inch seems unlikely anyway as it gets way from the way they position kindles - as smaller and lighter than a typical paperback, but of a typical size (albeit slimmer). Certainly for my uses the current 6-7" form factor is way more practical than a 10" device would be. And of course they're cheaper being smaller.