Well, I'm no expert but here are my two cents...

When comparing actions, one action must be genuinely compared to another action, not to a noun..

For example:
Playing football is better than tennis.

The above sentence sounds illogical because the act of playing football is being compared to only the noun "tennis". What is the author trying to say? Is playing football better than playing tennis? Or is playing football better than watching tennis?

If someone were to say the above sentence to us, we might correctly understand that the person is trying to say that playing football is better than playing tennis, however there lies our assumption that the two actions (playing of both sports) are being compared. The sentence though, at the end of the day, is grammatically incorrect.

The same catch is in this problem. What option C does is that it compares the cost of "maintaining dirt roads" to "paved roads" which is not the intent of the statement.

In the example that you've given "My toe is bigger than Joe's" the omission of the word "toe" does not distort the meaning of the sentence because the possessive form "Joe's" has been used. To equate this with option C above, this sentence would've been written as "My toe is bigger than Joe"..This creates the illogical comparison that my toe is bigger than Joe as a whole..

In conclusion, I'm not sure what the rule is..whether only nouns can be omitted or both nouns & verbs. But the key is that two like items must be always compared...noun to noun..action to action..phenomenon to phenomenon..

Hope this helps!!