This is because there are always two downsides, the risk of investing just before a huge crash, but also the risk of holding out while a boom passes you by. People always psychologically overweight the former due to loss aversion, but the latter is more pernicious.
One of those risks a 70% loss the other one merely risks unrealized gains.
This is an orthogonal issue. If you DCA for 12 months and then a crash immediately occurs, you suffer the exact same fate (you are worse off than someone who had 12 months of investment returns prior to the crash). Does this mean you should increase DCA horizon to 24 months? The only way your framing makes sense is if you have prior knowledge that a crash will occur during the DCA period.
The optimal strategy can't possibly be (b), because it would have the bizarre implication that two investors who have exactly the same preferences and who currently have the same amount of wealth would want to allocate their investments differently depending on how far in the past they started investing.
Edit: I'm quite sleepy right now, but I think the way the mathematics works out is that the risk arising from an asset is a convex function of the amount allocated to it. So by Jensen's inequality it's less risky to invest 50/50 in cash and stocks for two years than to invest for one year in cash and one year in stocks, for the same reward.
Agreed that you shouldn't try to time the market, but it is of course possible that you invest that lump sump at a high, and then see a significant drop soon after. Sure, over time that drop will almost certainly rectify itself, but psychologically you might feel better about buying in over a longer period of time.
Living with slightly lower long-term returns in exchange for peace of mind is a perfectly valid trade off that people can choose to make.