it is forbidden because black is the original colour:
As for black dye, the mukhtar mazhab (most favoured opinion) supports its vehement prohibition." The underlying reason for it's prohibition lies in the fact that black dye resembles the original black colour of the hair (Mirqat). In other words it tantamount to deception and delusion.
http://www.darululoom-deoband.com/english/books/masailofhair.htmHowever, an exception is made in times of war, so that the enemy will be intimidated by armies of warriors who all appear to be in the prime of their youth.
Some of the early Muslims, including some Companions of the Prophet (peace and blessings be upon him) such as Sa`d ibn Abi Waqqas, `Uqbah ibn `Amr, Al-Hassan, Al-Hussayn, Jareer, and others permitted the use of black dye. Some scholars do not consider the use of black dye as permissible except during time of war, with possibility of making the enemy thrown off balance by seeing all Muslim soldiers in their blossoming youth.
http://www.islamonline.net/servlet/Satellite?pagename=IslamOnline-English-Ask_Scholar/FatwaE/FatwaE&cid=1119503544220 Masa'lah: Black dye which has the similitude of the original blackness of the hair is haram for all save the mujahideen. (Muslim warriors)
http://qa.sunnipath.com/issue_view.asp?HD=1&ID=102&CATE=90Sid