Why wouldn't I put the single preferred option into its own table, instead of having a 'Preferred' column?
It depends.  There are cases whether one design or the other are satisfactory.  

If you are doing a lot of queries only on the preferred or default entry, then the second option seems better.

If, however, you are normally doing lots of queries for all the entries, regardless of whether they are preferred/default or not, the first option is a little easier to set up and manage.  

And if most of your queries want to retrieve all the entries except the preferred/default one,  you'll find the first option a lot easier.  I can't think of such a case off the top of my head.

And, in most cases, these tables are so tiny that performance considerations will be secondary.