We're talking about an unknown object here so either works, but if you go with det, you have to pick dyrt at the other end of the sentence. En nackdel är att det är dyrt. This latter sentence is actually ambiguous: it could be about an object, but it could also be a more general statement about how things are expensive somewhere in general. The version with den can only be about a specific object.
Bear in mind that all translations are entered by hand, by the course creators or (after the fact) by the moderators, and there haven't been a lot of mods recently.
Also, the double "that" is likely to confuse a lot of non-native English speakers, where the first "that" is a conjunction, and second is a pronoun. (Heck, grammar confuses a lot of native speakers as well.)
That said, your translation is valid, and you do understand the dual use of den/det to mean both "it" and "that". But if you stick to the most obvious translation, you'll usually be rewarded.