A lot of octo species flash dark when they're startled or angry, and perhaps some get more reddish as they do it. In general (I think this applies to all the incirrate octos) their has 3 layers of the pigment cells, chromatophores, that are go from light deeper to dark at the surface, over a layer of reflecting cells, leucophores, that are primarily white but are very good at reflecting the color of the environment around them. I don't know where the "red default color" comes from in the GPO (giant pacific octopus) but it doesn't seem to be the "dark" chromatophores all turned on. I suspect that the octos that have a reputation for turning red have reddish "dark" top chromatophores, while other species have more dark brown or black.
I'm not sure where the "octopus blood is a poor oxygen carrier" came from originally, I've run into it quite often, and I think it was a conjecture sometime in the mid-20th century. It may apply to some species in some way, but there are at least some glaring counter-examples: squids have roughly the same blood as octopuses (or octopodes, for the pedantic people) and many of them are very active in low-oxygen environments: in particular, humboldt squids spend a lot of their time in a deep layer of ocean that's very low oxygen, and they, like many squids, have to keep swimming to avoid sinking. If they tired quickly and needed a lot of oxygen, this lifestyle just wouldn't work.
I seem to remember that there are just different regimes of operation for hemoglobin and hemocyanin, and each has strengths and weaknesses. The study that led to this fact getting repeated a lot, if I remember right, studied one aspect in which hemoglobin worked better than hemocyanin, but didn't take into account other factors. Unfortunately, I don't remember the details, but I had heard this claim quite a bit when I first joined TONMO, but the more I've learned, the less it makes sense. I have the impression that most scientists who study cephs don't believe it at this point, but some of the books science journalists and popular science writers refer to make the claim a lot, so it continues to be repeated.
I suspect that the major source for this may be Jacques Coustea's 1973
Octopus and Squid: The Soft Intelligence citing Wells. The passage from Cousteau's book is:
In his excellent work, Brain and Behavior in Cephalopods M.J. Wells devotes a chapter to what he calls "The Downfall of the Cephalopods." He begins by pointing out the perfection of their senses, which, he says, approaches, and sometimes equals, that of vertebrates. Where, then, is the element of downfall? For Mr. Wells, it consists of a "historic" defect of cephalopods which had its origin, among other factors, in a peculiarity of cephalopod blood: it is not red, like that of mammals, but "hyalin," or blue-green. Its volume is considerable, and it is driven through the cephalopod's body by a powerful heart. But the respiratory pigment which fixes oxygen in the blood is not the same as the hemoglobin which gives its color to human blood. There is no iron in its composition, but only copper: hemocyanin. And copper is not as effective as iron in carrying oxygen. Among cephalopods, the total capacity for absorbing oxygen runs from 3.1 per cent to 4.5 per cent, while, among fishes whose respiratory pigment is hemoglobin, it is 10 per cent to 20 per cent.
This explains the phenomenon of "breathlessness" which we so often noted among the giant octopuses of Seattle and the octopuses of Riou when we forced them to swim for any distance.
As much as I admire Cousteau and Wells, I think in the light of modern evidence this is probably an oversimplification. I've noticed that Wells sometimes tends to mix fact, interpretation, and wild speculation on occasion (I have a particular beef with his description of the octopus arm nerves' capacity.)
It is true that octopuses spend a lot of time still and then become active for relatively short periods, and they tend to be ambush predators, so they have bursts of activity. But you could say the same thing about cats.