I feel like a geek hero, swooping in to save the day! However, I think Timmy has a pretty good explanation. Here's my take on it:
We need to see a flaw in the application of a principle.
The principle has a nice juicy "only if" in there, so I'd pay attention to the necessary and sufficient.
It boils down to healthy --> ~ detracting from soc. dev.
Pretty straightforward so far. The contrapositive is easy: detracting from soc. dev. --> ~ healthy.
The application concludes that Megan's reading is not healthy. So, we should learn that it detracts from her social development. Instead, we learn that it reduces the amount of time she spends with others. Is that detracting from her social development? Hmmm, smells like a gap to me!
(D) points out this very gap - the argument assumes that lost interaction time detracts from social development.
As for the other answers:
(A) splits hairs between a universal claim and a generalization. The principle gives us a universal claim - it's a conditional statement, it should be always true!
(B) brings in other considerations. We need to stick to how the application messes up the principle. In essence, (B) is a premise de-booster.
(C) is tempting, as some LSAT arguments do a naughty switch like this (e.g. is something that is not bad good?). However, the application never actually refers to something being "unhealthy"--we are simply told something is "not healthy." Thus, the application bypasses this issue.
(E) is always tempting - it sounds so LSAT-like! However, there's no switching around here. In this case, that would sound like this: What Tom is doing doesn't detract from his social development, thus it is a healthy intellectual activity.
That clear it up?
#officialexplanation