She said, "It's because the generic crayons don't color worth a flip." I checked it out the next time I was playing with WBill Jr (our house is non-discriminatory when it comes to coloring utensils) .... she's right, the cheapies don't work very well at all.
Dunno about pencils. I prefer the real wood ones, over those plasticized ones. But that's just a preference, both write OK, near as I can tell. I've got "Ticonderoga", "Eberhardt-Faber (in #2 and #2.5) and some generic ones right at my desk, right now. All of them leave a mark when I scratch them on a piece of paper....
With all due respect, your wife isn't the one doing the 'creative' coloring. More likely than not, the child sees no difference. The enjoyment the child gets is satisfaction in completion, and with a good "well done" added to that.