"¿Por qué ustedes no estudiaron?"
Translation:Why didn't you guys study?
It's fine. You don't need "guys" or "all" in English. They just clarify that it's a plural.
When Duolingo throws in an extra word that works in a sentence, they generally want to see you use it. Your answer is perfect, but they want to test to see that you have grasped that ustedes indicates plural.
The problem with ustedes is that it means you plural. Simply putting 'you' doesn't make that clear as it's singular.
Whenever I come across ustedes, I translate it as 'you all'.
¿Por qué ustedes no estudiaron?
Would translate to: Why didn't you all study? Is how I would translate it.
It's a bit ugly in English grammar, but it demonstrates to the duolingo system you're differentiating 'you all' plural from 'you' singular.