Why isn't the Moon totally dark when it is inside Earth's shadow?

It's because of Earth's atmosphere. White light from the Sun is a mixture of all the colors of the rainbow. When a ray of "white" sunlight passes at grazing incidence through Earth's atmosphere, molecules and aerosols in the air scatter blue light in all directions (this is why the sky is blue). The remaining reddish light is bent (refracted) into Earth's umbral shadow zone, giving the eclipsed Moon a coppery glow:

The exact appearance depends on how much dust and clouds are present in Earth's atmosphere. Total eclipses tend to be very dark after major volcanic eruptions since these events dump large amounts of volcanic ash into Earth's atmosphere. During the total lunar eclipse of December 1992, dust from Mount Pinatubo rendered the Moon nearly invisible.