I think erronious belief of "white coat= albinoism=inferior" got a lot to do with it.
I also heard one theory that sheep does not recognize white dog as a "dog" and think of them as another sheep. That is totally false because there are other herding breeds that are white. Besides, I've never seen the sheep that doesn't recognize white shepherds as dogs. The sheep know if it barks like one, and bites like one, it's a dog!!! LOL
The only situations that I can think of that whites might not be a good choice... is possibly in combat situations where concealment is necessary. The bright white dogs might draw attention of enemies.