Iguanas have been an important food source in Latin America since

Using "being" is not always incorrect or considered incorrect in Sentence Correction questions.

At the same time, "being" is often used in incorrect answers in Sentence Correction questions because "being" can be inserted into a sentence in an illogical way without that sentence's sounding particularly incorrect.

So, to determine whether the use of "being" in (D) makes sense, we have to analyze the sentence created via the use of (D) to determine whether that sentence makes sense.

Here's the version created via the use of (D).

Iguanas have been an important food source in Latin America since prehistoric times, and they are still prized as being a game animal by the campesinos, who typically cook the meat in a heavily spiced stew.

Because of the presence of "being," what this sentences conveys does not makes sense.

The point to be made is that iguanas are prized as game animals.

What this sentence says is that they are prized as "being game animals."

The problem with using "being" is basically that "being" is in this case an unnecessary verb, and so adding it not only makes the sentence unnecessarily wordy but also results in the sentence's conveying a meaning that does not make sense.

We already have "are prized" as the main verb of this clause. So: "iguanas are prized as X."

Adding "being" may seem innocuous, because "being" is just a form of the basic verb "to be," but having that extra verb there does not make sense.

With "being," we have: iguanas are prized as being X.

The only reason this sentence may not sound entirely incorrect is that "are prized" is not a commonly used expression.

Let's drop "being" into another sentence, one in which the presence of "being" causes the same issues, but more obviously:

I like my house because it is being energy efficient.

Once again, "being" is an extra verb.

What the speaker really means is:

I like my house because it is energy efficient.

When "being" is included, the sentence almost seems to convey that the house itself is actively choosing to be energy efficient.

Q: "What is your house doing today?"

A: "My house is being energy efficient."

So, we have two reasons why the use of "being" may not make sense.

1. It adds an unnecessary or redundant verb, with the result that a sentence becomes wordy and conveys an illogical meaning.

2. A sentence that includes "being" may convey that something is actively choosing to be something when, in fact, that thing merely is something.