First off, according to yee ole wiki, "Colored cloth will cause Infdev and Alpha to crash as the blocks do not exist in the clients anymore.", so no coloured cloth for Damned. As for duping, if it could break the server, and we all know how fragile the minecraft server is, don't do it, not that fucking hard to understand. An admin handing out blocks shouldn't break the server so if the admin wants to do it, it's up to them.
Personally, the only thing the admin should hand out is water for the canals, along with maybe ice and snow.