In my pack, the cubmaster wants as a general rule the Webelos I to wear the blue uniforms and the Webelos II to wear the tan. When the badge is earned, the boys will get both the blue diamond and the tan oval. However, if the boy has outgrown his blue uniform by the time he is a Webelos, or is just joining as a Webelos, then he can just get the tan uniform.
I have heard that the blue diamond patch IS being phased out. My local store is not ordering anymore, but they are continuing to sell what they have. Therefore, it's safe to assume that very soon all webelos will be required to have the tan uniform.