B. The Native American population had been greatly reduced through war and disease.
The encomienda system didn't work because natives died of disease and also because the natives already knew the land and could easily escape if they wanted to. African slave labor was more effective because Africans had already been in contact with the Europeans for centuries (meaning they had built up a natural immunity to their Euro diseases) and also because even if the Africans ran away, they wouldn't know where to go.