Guys - here is my two cents on the matter. I'm not a fluent Czech speaker (yet), but the question here basically boil down to how idiomatic speech is introduced. Duolingo is here presenting a sentence and its translation - a translation that is rather difficult to arrive at though not impossible through a logical approach to the words as we know them. However, common speech is full of idioms. Case in point - 'It wasn't me' is wholly grammatically incorrect in English. 'It wasn't I' is correct, but no one would say that. Perhaps someone would say, rather pretentiously, 'It was not I', or even more pretentiously, ''Twas not I'. We have here, even in English, a grammatically incorrect idiom.
I think the real issue here is the way in which Duolingo is presenting idiomatic speech - as something we are to try to logically deduce. Duolingo, I'm not criticizing here as I have never attempted to teach a language to someone else from scratch and I have no ideas what the potential pitfalls are. However, I will at least throw the question out there - is this the best way to introduce idiomatic speech?
In any case, I will be checking with my Czech friends (no pun intended) about this.
I agree that the Czech sentence literally says "I was not it."
On the other hand, in the same situation that Czechs would utter that sentence, most English speakers most of the time would say "It was not me" rather than "I was not it."
Given that fact, I understand why the DL team has translated the Czech as "It was not me", but I fell that "I was not it" should also be allowed.
The sentence "Nebyl to já." does not make much sense, because when the sentence refers to somebody as "já", he is also saying the sentence. For that reason, you need the verb to be in 1st person, singular as well.
In colloquial Czech, we might sometimes omit (hide) the "jsem" in the sentence and say just "To (jsem) nebyl já.", but that's incorrect.