On your average screen the computer is using 256 different reds, 256 greens, and 256 blues. This is what the image on the right represents, within these colors there are 16,777,216 color combinations that can be made. However if we were to not allow as many bits there would be less color options, the space where there was a color that cannot be made anymore still must be filled in. In this case the image on the right would look more like the image on the left.