"Is it legal?"
Because "it" stands for neuter. Νόμιμος is masculine.
However, there are some cases, that a neuter noun in English is considered masculine in Greek. For example, the mechanism, Ο μηχανισμός.
In English: It is a new mechanism
In Greek: (Αυτός) είναι ένας νέος μηχανισμός.
Don't trouble yourself with these cases though. Baby steps ^.^
I don't understand your answer to the original question. The "it" in the statement could be referring to something that is either masculine, feminine or neuter in Greek ( an example Duolingo uses a lot is ο γάμος), so any of the three singular gender endings should be accepted.
Yes, normally there should be all three genders. Think about it the other way though. It might get confusing. Learners should first learn the basics. We basically introduced "it" as αυτό, neuter, which is of course correct, but can you imagine if we introduced"it" as a pronoun of triple gender? There would be a confusion about what is masculine, feminine and neuter. There are certain endings to tell the genders apart, but new learners still have some trouble making the distinctions, so we might have gotten reports like "why isn't το γάμος correct, since wedding is considered "it" in English and "it" could be any of the three genders in Greek? After all, -ος is an ending for neuter nouns too, like όφελος, νέφος etc."
This of course is just my personal opinion, as a native. I think that this is a bit complicated for the course. ^.^ To be honest, maybe it's just me that thinks so.