Is this a case of nobody in a position of influence wanting to hurt Larry's feelings?

No; plenty of people have expressed opinions of Camelia both pro and con. (I like Camelia, and not only because it annoys people to the point of threatening never to use Perl 6.)

I really think the official logo for Perl 6 should really be something that's open to debate.

Go ahead and debate it with Larry then. Good luck.