It absolutely can (and probably should) be 'their', especially since 'their' is an acceptable singular possessive adjective in English. Considering the sentence fragment doesn't specify the gender of the person whose pants we're talking about, neither 'his' nor 'her' really seem to make sense (given the lack of context).
If it said "su pantalón" translates into "their trousers," then that was a mistake. Contrary to popular belief, "their" is a plural possessive, not a gender-neutral singular possessive pronoun. To say that "su pantalón" translates into "their trousers" is to say that one pair of trousers were collectively owned by multiple people, an unlikely scenario.
But "their" isn't so specific in English as it is in Spanish since it can be used as a gender-neutral possessive, therefore it should be permitted in this exercise.
Examples: everyone washes their pants, no one eats their pants, one would find the taste disagreeable were one to eat their pants. "One" here is a gender-neutral pronoun, and "their" is the possessive it uses!
Yeah, this is his or her pants, but seeing as we don't know the gender it's their pants. Their is a perfectly fine singular possessive pronoun. http://www.merriam-webster.com/video/0033-hisher.html But apparently that's wrong?
No, it should not. If you said "their pants" in English, that would mean multiple people collectively own a singular pair of pants (an unlikely scenario) or the pants of multiple people. Though some English speakers informally use "their" as a gender-neutral possessive pronoun, that's incorrect. Remember that the point of Duolingo is to translate documents. There is no English gender-neutral (3rd person) possessive pronoun, so if you came across "su pantalón" and were unaware of the gender in question, you would translate that into "his or her pants."