Translation:They let me read that book because it is good.
the word is 'esse' - meaning 'that'. The demonstrative 'that' is used because it does not have to be physically close to the speaker in order to justify its significance to them. For example: Football - i love that game! If i used the word 'this' it would imply i was in the act of playing or watching a game of football. In this sense there is no implication that the speaker is in the act of reading or holding the book they are referring too. the 'correct answer' is wrong in using the word "this" because that would mean 'este'. I have reported it. Hope that helps.