Coloured vinyl is treated in another question. While I'm not sure I would hear the difference between a normal and a coloured vinyl record, picture discs has a noticeable worse sound quality. What is the reason behind this?
The simplest reason is that the outer, playable surface is not actually traditional vinyl, but a thin film, applied to the outer surface, as part of a 5-layer process in manufacturing…
film - paper - black vinyl - paper - film
The film is not as malleable as 'real' vinyl & doesn't press quite as well as traditional semi-molten black vinyl.
There is the possibility that the paper itself can contribute to the stylus getting a rougher ride over the bottom of the groove.
The reason picture disks are made from this 5-layer process can only be speculated - the obvious alternative of clear semi-molten vinyl applied either side of a single paper insert is presumably not a viable manufacturing solution.
Apparently Han-O-Disks use the vinyl - paper [or other substrate] - vinyl method.
I found this buried deep in Wikipedia comments… I really don't know what most of it means & there are no refs, but I guess it sounds expensive…
Only solvent (THF) welded Han-O-Disc (discs were pressed in two thin halves). Later releases used Radio Frequency (RF) welding and then finally UV diacromate welding.