A lot of it it's just pure speculation. We don't know for sure the answer to that.
It is speculation and one of the apostles (Can't remember who) spoke on the television show on PBS and said that's Mormon folklore and we should not continue repeating those things.
Rather than formulate an opinion from an authoritarian standpoint (Because the Authorities opinions are far from unanimous) I'm going to take this question from a theoretical standpoint.
To deny a family the great blessing and privilege of the Holy Priesthood based solely on the genetic quality of pigmentation creates a great schism within the human soul. On the one hand, a Saint has a righteous desire to reach out and bring their fellow men into the Covenant; while on the other, they must deny it to certain men because of their race even if they are in all other ways qualified for it. The denier suffers as well as the denied. If the Lord made that law, and if the Lord is good, then all those made to suffer the law deserve to be given a just explanation as to why they must suffer.
It was said by some that it is not merely the color of the skin that is the grounds for the denial, but rather the cursed blood line that it represents. The Bible and the Book of Mormon apparently support the idea that dark skin is a curse as seen in the marking of Cain and the Marking of the Lamanites (I wonder who was the cursed progenerator of the Asian race). Is it not written in the Articles of our Faith that "man shall be punished for his own sins?" The article does not merely mean that it is only Adam's sin that we are not guilty of, but that we are not guilty of ANY of our ancestor's sins. A man is his own man and will be judged for his actions alone. Nothing else is reconcilable with that article and nothing else is reconcilable with the human heart.
How could it be that God would allow a race to be punished for the sin of an ancestor then 5000 years deceased?
Some may say that the denial of the priesthood is not punishment at all, it is merely the withholding of blessings. Is there a difference? The priesthood, which includes the temple ordinances, is only the sole power by which a family can obtain the blessings of exaltation. How could denying that be punishment?
Some may say that it is only a temporary withholding of blessings, that they will have the priesthood ordained to them in the next life. What good can God do by denying them those blessings in the present? We can not allow ourselves to justify injustice in this life by saying that it will be justified in the next. Why deny a family the assurance of exaltation in this life when they fully deserve it?
Having not been given an adequate explanation for the need of our suffering, and in defense of the Goodness of God, I propose that the doctrine denying the priesthood to the blacks did not come from the Lord. It's source could only be the prejudice of those at the head of the church in it's younger days, propagated and perpetuated by tradition and deference to authority. I don't believe it to be the case that the early church leaders had a particularly strong prejudice against the blacks. In fact, the opposite seems to be true. But, prejudice was the norm in American society and I doubt they were able to fully overcome it. No doubt, upon observing the indentured and debased condition of the blacks as a race, a theological reason was sought after. Why did God allow it? Connecting this condition with the accounts of cursing in the scriptures, I'm sure, was natural. It would have seemed reasonable to believe that the blacks were still subject to that curse. The doctrine of a preexistence helped to explain how spirits are dispersed among the various peoples. Those less worthy spirits must be the blacks. How could the early church leadership justify giving the Holy Priesthood to a cursed race? They couldn't. I don't know of any canonized revelation denying priesthood to the blacks. I'm sure the church leaders felt that God had already shown so plainly the justification for the doctrine that they felt no direct revelation was necessary.
TheMark: