Well, cuz it means you're "surrendering one child to evil." And it's better to potentially lose all the town's children to death (they'll still go to heaven?) than to give one to evil. I would probably choose Choice A myself realistically, but I remember asking Anika about this back in H.S. and she immediately said Choice B. Of course I was never convinced that the bad guy here is totally evil or just a bad wizard (or even Death). But it also relates to the whole "we don't negotiate with terrorists" mindset, I think.