What causes 'sites/default/files is not writable' during Drupal 7 Install on Redhat w/ Apache?
I thought this would be a SElinux issue with security and I am a bit surprised that your solution worked.

For users with the "common" error, use the following command to provide apache with access despite SElinux security.

chcon -R -t httpd_sys_content_rw_t yoursite/sites/default/files/