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E-ink is only black white or grey.

Definitively not. Color E-ink does exist, and what's more: it exists in large sizes. This stuff was developed for digital signage projects.

Check out Magink.

Unfortunately in most real world situations it is easier to either use a billboard, or a LED screen.

Magink has an E-ink system used by billboards with a 9mm resolution. Curved lines would be a little pixelated, and you wouldn't be able to replicate wood grain, but it would be enough resolution for the the sake of the game, and could do some interesting things during half-time. The reflective nature of E-Ink would make it much better suited for this project than an emissive display, and if it is cheap enough for a billboard, it is definitely cheap enough for a court (especially since it would likely be used as a billboard part of the time). Most indoor courts get their surface properties from varnish/wax, not the flooring material so that wouldn't be a problem either.

My main concerns would be structural support (can this stuff take being pounded on by 200 pound athletes), and how you would replace bad cells once you put the varnish surface over it. Plus something like this would become out-of-date almost as soon as you finished building it.

It has been done alredy, see http://www.magink.com/ sure it is not cheap, but much cheaper than led displays. My company used to import these, and i can say that they do have brigth colours during the day, but must be artificialy ligthed during the nigth. I agree with you however, that they may never reach our desktop. As a bonus, they consume much less energy than traditional outdor led displays.

This Philips paper is good but there is already a Full color version capable of running video at 70fps produced by Magink. There was an article in the International Herald Tribune and New York Times in August!

Which shatters my fantasy of using it as a beamer replacement at home :-)

If these become ubiquitous, we can only hope the advertising people responsible for magink's clown-in-a-garbage-compactor website will not be allowed anywhere near them.