I also reject the claim that C and B are equivalent (unless the utility of survival is 0, +infinity, or -infinity). If I accepted their line of argument, then I would also have to answer the following set of questions with a single answer.
Question E: Given that you're playing Russian Roulette with a full 100-shooter, how much would you pay to remove all 100 of the bullets?
Question F: Given that you're playing Russian Roulette with a full 1-shooter, how much would you pay to remove the bullet?
Question G: With 99% certainty, you will be executed. With 1% certainty you will be forced to play Russian Roulette with a full 1-shooter. How much would you pay to remove the bullet?
Question H: Given that you're playing Russian Roulette with a full 100-shooter, how much would you pay to remove one of the bullets?
You reject the claim, but can you point out a flaw in their argument?
I claim that the answers to E, F, and G should indeed be the same, but H is not equivalent to them. This should be intuitive. Their line of argument does not claim H is equivalent to E/F/G - do the math out and you'll see.
Imagine you're playing Russian roulette. Case 1: a six-shooter contains four bullets, and you're asked how much you'll pay to remove one of them. Case 2: a six-shooter contains two bullets, and you're asked how much you'll pay to remove both of them. Steven Landsburg describes an argument by Richard Zeckhauser and Richard Jeffrey saying you should pay the same amount in both cases, provided that you don't have heirs and all your remaining money magically disappears when you die. What do you think?