Paraguay has a long history of stupid wars. They started the Chaco War with Bolivia over control of the Chaco region, which they thought was full of oil. Turns out it wasn't and it it's mostly uninhabited forests with some Mennonites now.
That was a limits problem to which several negotiated outcomes were tried, none of them successful. Then Bolivians tried a policy of encroaching military forts in the Chaco region. It was a matter of time before a Bolivian patrol would clash with a Paraguayan patrol. That's how happened. I wouldn't say it was stupid more than any other border wars are stupid.