Ironically, the writer so wary of (i)__________ was (ii)__________ with ink and paper, his novel running to 2,500 shagreen-bound folio pages — a fortune in stationery at the time.
Lets look at the second blank first, as there are clues immediately following it.
was (ii)__________ with ink and paper, his novel running to 2,500 shagreen-bound folio pages — a fortune in stationery at the time.
Well, if his novel ran to 2,500 pages which cost a fortune, he was certainly quite liberal with ink and paper.
The word from the choice list is profligate, which means recklessly extravagant or wasteful in the use of resources.
Now of course one suggest the word acquisitive as well for acquisitive means excessively interested in acquiring money or material things - and he did acquire 2500 pages of stationery. But the word "fortune" enables us to rule it out. For profligate has the sense of spending money excessively.
Now the word "Ironically" at the beginning of the sentence implies something unexpected is to follow.
Therefore, someone "so wary of (i)_________" , would be unexpectedly extravagant only if he was wary/cautious of extravagance.
And that is the word in the choice list as well.