Generally the way things go is that Blue beats Yellow (used in the proper reactive rather than proactive manner), Yellow beats Red, and Red beats Blue (it busts Blue's defenses pretty well).
So KnightHawk's right, Blue does counter Yellow. You just wait for their attack, then block it, and use the block to chain a counterattack while the Yellow user is still recovering.
There's a great Blue combo that I've pointed out before that's difficult to do, but it's the fastest combo in the game, and can kill a player outright if you do it correctly. Goes like this:
attack(hold)+left, forward+right, left, forward+right, left,...ad infinitum.
One cycle of this combo will hit six times is just over 1 second. With the new damages, you'll be doing 180 points if you land all six. Hell, if you land just half of them you'll do the equivalent of a Strong swing at 90 points. If somebody sees me in a server and wants a demonstration of this, i can demonstrate.
This will chew up an unwary Yellow user.
Also, Yellow is seeming to be the best style for most people, but remember, most of the servers out there are FFA, so that's where most people's experience lies. If you do more private duels, I think you'll find that the advantages of Blue over Yellow start to become more apparent. I'm actually getting quite good at using Blue in duels, myself. Just as ZeroWingZero about the priv. duel we had on the death star map last night. :P