Why are passenger cabins white?
The picture in your question shows the answer: Most lighting in the cabin is done indirectly, so you don't see the light source directly. Instead, light is reflected off the cabin interior. If you would paint that interior in gaudy colors, you would have undesirable effects. Colored surfaces absorb some wavelengths, so the brightness in the cabin is reduced. Plus, the selective reflection will shift the color of the light.


Newspaper and magazine paper would not be white anymore, but have the color of the cabin interior. As @mins correctly points out, the brain can compensate for this. It will, however, make it difficult to read text printed in the color of the cabin interior because it would no longer stand out from the background.
The color pictures in the magazines would look funny. If you now think people could switch on the reading lights: Note how few passengers actually know how to operate them.
The food you get served would look funny. It is already not a pleasure to look at in most cases, but in colored light it gets even worse.


While it might be fun momentarily to be in a room with mood lighting, being exposed to this one color for the full length of the flight without a possibility to escape (except for closing your eyes) will offend most passengers.