Mephistopheles says it, which means the devil gets the best epistemological joke in the play. Theory that has lost the color of a living thing has lost the thing. Goethe spent a life in both: colors, plants, novels, and the administration of a small state. He would not have let the devil have the last word. Readers often do.
In the original
Grau, teurer Freund, ist alle Theorie, und grün des Lebens goldner Baum. · German