Tacking on to this -- historically women have often used initials to mask their gender when publishing. Any chance that sparked a general trend?

I think you're just experiencing some sort of confirmation bias here. A good way to test this is to quickly search for authors that publish under initials today. I would wager there are far more (just because of the sheer increase in number of published authors) than there were in those 60 years.
I think you're abusing the fact that there were a lot more authors active between 1890 and 1950 than there had ever been before to observe a trend that doesn't exist.

Since this thread seems to be a lot more speculational than most, let me suggest--if it is indeed a real phenomenon instead of a confirmation-bias illusion--the telegraph as a contributing factor. The first (long-term operational) trans-Atlantic cable was completed on 18 July 1866, Britain was connected to India in 1870, and a trans-Pacific cable was successfully connected in 1902, completing a world-straddling circuit of electronic communication... which charged by the letter.

Telephone communication lagged significantly behind; although the first "long distance" (50-100 mile) lines went up in the late 1800s the first commercially available calls weren't available until 1927 and they cost $75--about 1/5th the price of a new car. Direct long-distance dialing between major cities and cheaper trans-ocean calls (okay... less monstrously expensive would be more accurate) became available through the 1950s.

So that might be another coincidence, but it tracks well with the dates of the "initialization" trend you've noticed.

In my job I came across the founding charter and other contemporary documents from an organization created in Texas in the 1930s, and the vast majority (if not all) of the names therein (20+ founding members) were also denoted by two initials and the last name.

Could it be that this trend may not have between limited to writers?

I wonder if it wasn't partially the formal style of the day? I briefly had a job digitizing old business documents from the civil war to WW2 and seemed to encounter this a lot as well (also lots of abbreviated names Geo. for George and Wm. for William especially).

I've always wondered this with respect to department stores. The initials used in the modern electronics store H.H. Gregg have always reminded me of a foregone era, so much so that I never think of them for purchasing new electronics. I don't have a source for this, but I suspect small businesses in the early 20th century were more commonly named with the initials than they are today. Is there some sort of database of commercial entities with names included that goes back that far? I would love to do some analysis on it if so. This is a great question.

This is a great question! It's worth note that the 2 initials naming trait is a uniquely British phenomenon. Source It also appears that having a middle name was the purview of the upper class in the U.K. during this time. (Apparently the first usage of the phrase 'middle name' was in 1835, though the practice is much older among nobility). In fact, as late as the 1911, only 37% of people in the U.K. had a middle name. The number is now 80%.

I suspect that the upper-class and nobility had a smaller range of names to choose from and it became socially necessary to distinguish people with common names from one another, especially in situations like boarding schools. You've got 20 Johns in a boarding school class, so you end up with J.R., J.T. etc. etc. What started off as practicality likely became a mark of class. Any author wanting to associate himself or herself with being refined/dignified/upper class etc. would do well to adopt the naming practices of the upper class.

As others have pointed out, part of your observation is likely confirmation bias. However, what you did observe happened quite often and surely for more than one reason. I'll speak to one reason that may have been an influence that has not yet been listed.

In some cases it is possibly a tradition from newspaper printing. I cannot speak with for the trends of newspapers with large bases of readership (where the the initial+last name format might not be informative enough for readers), but I can tell you that newspapers of smaller circulation (think rural areas) during that time period often, and sometimes exclusively, did not give a person's full name, but rather they referred to people by the format of initials + last name.

Whether this tradition led to authors following suit when their books were published, or whether newspapers picked it up from publishers, I can only guess at. But in a newspaper with a small readership (think of a small town, 300 people, where you do actually know everyone), it would allow you to quickly identify the person being talked about in the shortest number characters, which is quicker for typesetting and therefore more economical.

As for specific sources: Oklahoma had an archiving service where town newspapers would send one copy of each printing to a specific agency, and that agency archived the papers. You can order copies of the archives, which my father, a local historian by hobby, has done. And I've gone over hundreds of articles with him where the initial+last name format is rarely, if ever strayed, from. My father was fascinated by this and started looking out for it during his research.

Not being in a university setting, I don't have quick access to examine other archives to see if this holds true at a larger scale. But it holds very true for the parts of Oklahoma settled in the Land Run of 1889. And other papers we've seen from that time frame in other nearby states often follow suit. I haven't sought out counter examples, but surely they exist. Someone else might be able to pull up a newspaper from that time period from a small town and find the same format used.

Aside from the usage in articles, often it is seen in a side column that lists local activity. The activities listed are almost trivial but the listing gives a wonderful insight into life. The column will read like... A.J. Barton went to Enid
K.L. Wing returned from Kansas
M.K Ward had a son
R.L Malt purchase a lot from R.T Bowls

The paper in my town was published into the 1900s, and growing up there were people in my town who went by their initials and some claimed it was due to the paper. Obviously this is not definitive, but it may have contributed somewhat to how people referred to themselves in person/print and on into world of publishing.

edit: words