According the the article I posted above, incumbency had nothing to do with the color destinations prior to 2000. It was all rather arbitrary, but most networks (including the ones I watched) invariably used blue for the GOP and red for Donkeys. In every election. Then in 2000, suddenly ALL the network started using the opposite color scheme.
My contention is not that it was a "communist conspiracy," but a collusion by the networks to banish once and for all the embarrassing (for liberals) Dems = Red association. Then, as you said, the use of "red states" and "blue states" became embedded in the national consciousness, and that was all she wrote.
It’s possible the consensus developed in 2000 was based on the desire to not associate Dems with reds. It’s probably just as possible some other consensus (including incumbent blue) would have been reached in 2004 had the events of 2000 not taken place. Nobody really cared much about the color scheme before then.