I'm going to side with Duolingo here. “Serait-ce” in this particular sentence is not horribly wrong, it's something a French person could say, but it sounds a bit weird and I think it's formally incorrect.
Ce is the correct pronoun to refer to a previously mentioned object or concept when the pronoun is the subject of the verb être. Il is usually incorrect in this particular case. So “Serait-ce possible ?”, as a full sentence asking whether something that was previously mentioned is possible, is correct. However “Serait-il possible de … ?” is different: here the subject pronoun does not refer to something that was previously mentioned. Instead, the subject pronoun is there because French absolutely requires a subject. And in that case, the pronoun is il, even with the verb être.
“Serait-il/ce” is the formal way of asking a question. At this level of formality, you can't deviate much from formal grammar. I don't find ”Serait-ce possible de … ?“ idiomatic at all. On the other hand, with the medium-formality way of asking questions, I think “Est-ce que ce serait possible de … ?” sounds more natural than “Est-ce qu'il serait possible de … ?”, which sounds a bit formal. “Est-ce que ça serait possible de … ?” is also possible and sounds more informal. With the informal way of asking questions, “Ça serait possible de … ?” is the most natural pronoun, “Ce serait possible de … ?” is ok but slightly weird, and “Il serait possible de … ?” is not idiomatic due to mixing formality levels.
Looking at written usage, “Serait-il possible” beats “Serait-ce possible” by a wide margin, but less so over time. If you look at occurrences of “serait-ce possible”, there is almost never a complement: the pronoun ce refers to something that was mentioned previously, in which case it's the grammatically correct pronoun. When the subject pronoun is a grammatical subject with the semantic subject coming after the verb group and introduced by de (+ noun) or que (+ verbal phrase), the pronoun is almost always il, not ce. There is some usage of “serait-ce possible de …” and “serait-ce possible que …”, but not much, and (especially with de) usually in dialog.