Final answer:
Bilbo refers to victory as a "gloomy business" because, despite winning, they suffered the loss of many good soldiers. His comment underscores the harsh reality that victory often comes at a hefty cost, including significant human suffering and loss. Option number C is correct.
Step-by-step explanation:
The reason Bilbo says that victory is a "gloomy business" is C: Though they won the battle, they lost many good soldiers. In war, even when a victory is achieved, it often comes at a great cost. The realities of war include loss of life, suffering, and turmoil, even for those on the winning side. This sentiment echoes historical reflections on wars such as World War One, where the aftermath of the "victory" was questioned in the face of massive casualties and societal impacts. Soldiers and leaders alike have come to learn over time that the spoils of war often do not outweigh the heavy price paid in human life and suffering.
Additionally, the strategic texts and observations of wartime outcomes often reflect on the futility and damaging aspects of prolonged conflict, emphasizing that victories can lead to a depletion of resources, dampened spirits, and the tragic loss of lives, thus taking away the glory and leaving behind a profound sense of melancholy and reflection on the true cost of war.