Aha! I figured it out! It's because I gave only a group called Admins permission to that folder, with two users in that group. As soon as I add an individual user, the option shows up.
I hope rejetto can add a little smarts to the process of figuring out whether or not to show that option by looking at what users are in the assigned groups.
Thanks everyone for your help. I'm not going crazy after all. :-)