I'm not sure what the confusion is behind your post, it looks like you do have the correct understanding of the way in which (C) weakens the argument by means of introducing an alternative cause.
Perhaps the reason (read: cause) why the Akabe don't drink too much of this tea in the morning is not at all due to the high levels of caffeine in the leaves, but rather that the leaves provide a soluble narcotic. The 'soluble' aspect means that the mind-altering abilities kick in when mixed with water, which of course would happen during the process of making tea.
Also, a narcotic doesn't necessarily imply that it puts you to sleep, as the term has shifted meaning to refer to any number of (typically illegal) drugs that can greatly affect mood or behavior. But whether its the kind of narcotic that does induce sleep or a type that leads to psychedelic hallucinations, either way it doesn't seem like a smart thing to ingest in large amounts in the morning before an intense work day. This presents an alternative to the caffeine explanation, and is precisely why (C) is the correct response.
Now remember, caffeine can be your friend on LSAT day (to a point!), but it's best you don't follow the Akabe's lead: stay away from the narcotics!
(This last message was brought to you by McGruff the Crime Dog, and I apologize for any non-80s babies who miss that reference