In this particular job we have discovered that to be

I think this question is from a Barron's book.

We need to parallel the two parts of the "more important" comparison, but A, B, and D all improperly mix gerunds (being diligent/bright) and infinitives (to be diligent/bright). E begins with a preposition "by," which eats up the first object "being diligent" and leaves the verb "is" with no subject. C is the only possible answer.

However, C is a little odd because I don't think "brightness" is often used to describe intelligence, so C might not be very representative of the actual GMAT. I think you would be more likely to see "being diligent is more important than being bright," as the GMAT does consider the use of "being" as a gerund to be proper in some cases, and this is likely one of them because we want to compare the state of having one characteristic to the state of having another characteristic. See OG13 #100 (I think that's the heavily committed question).