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I don't know how they can just take away a patent (don't know much about the process), but it seems it may happen.

Here's the usual outline:

1) Evil company gets absurd patent on obvious technology.
2) Evil company makes half-hearted feeble attempts to license patent.
3) Evil company is laughed at.
4) Evil company sues small fry puveyor of possibly infringing technology who cannot afford to mount a legal defense.
5) Small-fry purveyor rolls over, evil company makes a little money, and works their way up to larger purveyors.
6) Eventually, evil company sues an industry big-shot who hires a top-dollar law firm to defend them.
7) Top-dollar law firm recruits experts in the field (in this case, maybe the people who built 70s disco lighting gear) and gets them to write reports and testify to the effect that the patent is invalid and/or that the product doesn't infringe the patent.
8) After a year or two of expensive litigation, either the evil company is blown out of the water, or reaches a low-dollar settlement with the industry big-shot.

So, at some point, GE, Phillips, or some other big industry lighting player is going to ship a product like the dimmable LED lamp that I want. Color Kinetics will sue them. Hillarity will ensue. Probably the place where these sorts of maneuvers get the most interesting is the tactics taken by the top-dollar law firms. The standard tactic, as best I understand it, is really a sort of intellectual squeeze:

Defense: Your patent is invalid because the same thing is in the prior art.
Offense: Well, we invented this and this new thing.
D: So you're saying that your patent only really covers this small new thing?
O: Oh no, you see, it's very broad.
D: Which means that it covers the prior art so it's invalid.
O: Fine, maybe it's narrower than that.
D: Fantastic, that means our product doesn't infringe your patent, because we don't meet the new, narrow definition of your patent.
O: Now, wait a minute...