I agree that it's brutal.
Sure, be thankful that we have dyes and a system at all - I suppose - but you would almost have to go out of your way to design something this clunky and unwieldy (maybe it's the same person who did the AH selling piece?).
When applying dye you should be dying whatever you are displaying - be it a costume or not.
Better yet, dying individual armor pieces is so 10 years ago and is clunky and tedious to maintain. I far prefer systems - even if it's completely unrealistic - where you dye the SLOT. This could be done per costume to help keep up the gold cost of applying dye. But it's nice when you can just dye the slot and whatever you throw in there assumes your color scheme - that way you're not having to waste time dying any new piece you add or if you keep a lot of costume gear around you can more readily swap pieces in out when experimenting without having to worry about colors.
Get a new upgrade while you're out rampaging? No problem, equip and it matches your color scheme due to dye by slot - vs now you look like bozo the clown with mismatched clothing and need to return to a special vendor in town just to pay gold to get your gear looking solid. Ridiculous. In fantasy you can justify ANYTHING - it's magic, right? In sci-fi you should be able to similarly justify anything with technology - hey, it's nanobots, you can't see them so you have no idea!
Really, in this MMORPG day and age, dying individual pieces of gear is barbaric.
I'd imagine this is a case of the idea of dyes being in, and costumes were added after or later without accounting for dyes, and costumes broke dying armor, so they came up with this crappy workaround to not have to redo the whole system, since dyes are kind of fluffy and trivial and sorting it out for real can be patched in under the we pay 15/mo to finally get the whole game functional part of the MMORPG process.