But then you're pretty much committed into saying that the incomplete camo mechanism that could not yet produce even the slightest colour change must have had some other advantages. If this is your explanation then you'd need to find some advantages.
This is like the creationist demanding a fossil for every single species dating back to the first organism. Such a demand is unreasonable since it is not what we ought to expect. We might not be able to explain every single function of every mechanism in every species, but that is not a flaw of evolution. That is simply a black box in our current understanding. It does not signal a problem. Also, genetic drift can allow neutral mutations to become prevalent in populations. So the reason for some features may not be that it was advantageous, but simply due to chance.
Let's take the Blue Ringed Octopus for example. All BROs have camo, meaning it must have been a necessary adaption seeing as the all the non camo ones died out.
Can you show me a phylogenetic tree for the Blue Ringed Octopus? It may be that this species is simply at the end of a branch, and that there have been no Blue Ringed Octopi that have gone extinct. However, even if there were, this mutation may have caused the species to have a reproductive advantage (i.e. survival benefit) over other closely-related species making this mutation to become commonplace. However, this doesn't mean that the previous species needed this feature to survive in their environment, only that this mutation was beneficial and therefore was selected.
You also need to be careful when you make arguments based on the categorization of a species since it is a fuzzy concept. After all, every organism is of the same species that preceded it. This means that you are related to different species, even though different species can't reproduce. Sometimes species are categorized based on their mutations rather than their reproductive compatibility (this is a more pragmatic approach in paleontology). This means that the defining attribute of a Blue Ringed Octopus might be the trait that you are trying to explain. If this is the case, then the reason why all Blue Ringed Octopi have that trait is because that is how the species is defined, not because all the others have gone extinct.
So you basically have to say that the incomplete camo mechanism gave some serious advantage, but I find that hard to believe.
I find many of things hard to believe, all of which are in fact the case. This is why I'm asking you to provide evidence, not your feelings. After all, advantages are dependent on the environment. Sometimes, it is beneficial to have X, when in other cases, X is considered a disease in need of treatment. Some would have this hard to believe since the same condition can be both good and bad, in different contexts; but it's true. So let's leave the feelings aside and look at what is the case, and not what we think is the case.
Also, none of this answers my question as to why camo isn't present in species who don't need it. Camo is different from other adaptions because it's advantages aren't contextual- no species would be hindered by the option to change colour, it can only serve as an advantage.
Stop asserting things without evidence. I don't know that the ability to change color is always an advantage. Take for example a plant that has a certain toxin in its roots that has no effect on the plant. Would you say having that defense would always be a benefit?
Well, then you would be wrong. Virtually everything has a cost, even if that cost is simply requiring nutrients. For further reading, see page 68 in The Greatest Show on Earth by Dawkins. So, let's stop it with the assumptions and start providing justification for them.
But I still don't see why they would need to die. Unless they're saying that the suicide conserves energy which allows more offspring to be created. So if they're saying the suicide is necessary to create more offspring, then I can accept that.
First
Google hit: "Salmon die after spawning due to exhaustion and malnutrition. As most salmon are sea fish, the environment of the creeks and streams are poisonous to them and they are unable to feed as they swim up stream. By the time they get to the spawning grounds they have used up their stores of energy and cannot get back to the sea."
Their death is simply a result of their reproductive behavior.
Although, this would mean that with the every generation the population increases correct? So wouldn't that mean that eventually there'd be too many of the species, and they'd imbalance the ecosystem by exhausting too much of their food supply etc.?
This is no more true than for any other species. All it is saying that species that reproduce using this method leave offspring in greater numbers than other species. This has no bearing on the death rate for either species. As I have explained before, when the population increases, competition for resources causes the death rate to increase. This causes the population to stabilize at an equilibrium.