I remain unconvinced, and still think (C) is a better answer!
Answer (C) does not say that the nesting boxes are smaller, but just that they provide less space for eggs (because they get overcrowded). In my view, the given statements support this conclusion [that the boxes are smaller than the natural nests] because they seem to link the ducks' failed reproductive efforts to the fact that the boxes become overcrowded. If, by negating this conclusion, the natural nesting sites had just as much, or less, space for eggs, then this reproductive practice would seem to be disadvantageous from the start. Therefore, (C) seems to me to be the right answer.
Answer (D), on the other hand, makes less sense in my view. Why would the ducks' reproductive efforts be more successful when the boxes are hidden? Is the assumption that those nests, though hidden, could still be found by some and thus the practice would become less rare?
Comments
D is the correct answer because it connects the ideas about visibility and ducks laying eggs. That is, the boxes nests are becoming overcrowded with the "parasitic behavior" of other ducks laying eggs there because they are not as well hidden as the natural nests. While this may not be a 100% validly drawn inference, it is pretty well supported which is what we are looking for in a MSS type question.
Hope this helps!