I found this on another site. In summary it says that their traditions say that their skin was literally blue.
The color was indeed true and not poetic imagination. Narayana is apaara, anantha, agadha. Shri Rama and Shri Krishna are none other than maha-Vishnu. Just like the ocean and the sky is blue colored has no end and is apaara and anantha, agaadha Sri Krishna and Sri Rama had this color to convey their inherent natural properties to us. Ananthatva, aparathva, agadhatva… Normal humans are black, white, brown but paramatma is not like us. He is indeed different. Extra Information : Excerpts from http://www.nationmaster.com/encyclopedia/Krishna :"Krishna's body is the colour of a enchantingly beautiful dark raincloud. The philosophical backdrop for Krishna's dark blue skin is that Vishnu, who is ultimately incarnated as Krishna, is also known as Narayana. Narayana means "born of water." This is because water, seen as the base principle for life as we know it on earth, the nourisher of plants and animals alike, the very substance of cyclic existence, is essential to preservation. Vishnu, who in avatar form comes down to earth to help preserve dharma, is epitomised by the principle of water, being himself the God of Preservation. As water is commonly seen as being blue, and Vishnu is said to sleep in Yoga Nidra, floating on cosmic waters on Shesha (a snake-god), it is only natural that Vishnu's representations are all blue. By syllogism, it transferred to his great avatar, Krishna"
My opinion is that if such people ever existed, they probably really had blue skin, maybe not exactly the shade in the depictions, but blue.
Not to be confused with the blue people of Appalachia who were blue because of a recessive gene and inbreeding.