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The primary benefit of implementing whitelisting for authorized IP addresses in a web server environment is that it effectively limits access to the server, allowing only requests from predefined, trusted IP addresses. This significantly reduces the potential for unauthorized access and attacks, which directly correlates with a reduction in performance issues. By filtering traffic, the server does not have to process requests from potentially malicious or non-vendor sources, leading to a more efficient handling of legitimate traffic and thus improving overall server performance.

While other options mention aspects like encryption and authentication, these are not directly related to the function of IP whitelisting. Whitelisting does not enhance data encryption, nor does it inherently improve user authentication processes; rather, it focuses specifically on network security and traffic management. Therefore, the correct answer highlights the direct impact of whitelisting on reducing non-vendor requests and improving server performance.