"State," of course, could also be correct. The objective of many of the questions is usually fairly limited. Here the purpose is evidently to teach that one translation of "상태" is "condition." I expect it is difficult to formulate questions to accept all the possible correct answers. Duolingo is a great course for the price, but naturally it has many shortcomings. One is the lack of context, which often permits many varied translations in reality, but which may not be included in the possibilities selected by the course authors.