Assuming 90% of the male population was killed, it wouldn't have been too difficult for both countries to resettle the paraguayan land with their own males and thus be able to split the country between themselves. At the time both countries were the most powerful in South America and they also had foreign support from Britain so any intervention would have been unlikely. So why didn't they do it?
Edit: I meant a complete anexation of the land, rather than the partial gains both countries got
The triple Alliance treaty and detailed the pre-conditions of war among them were the future borders of Paraguay with both Brazil and Argentina. The treaty also assured the independence, sovereignty and territorial integrity of Paraguay after the aforementioned borders were drawn.
Now for the more realist geopolitical reason, Brazil didn't want to increase it's borders with Argentina.
You also have illusions if you think the winners were in conditions to dominate all that much. Uruguay left at the beginning of the war due to internal turmoil. Argentina left at the middle of the war because of the same reason.
Brazil was financially ruined and the war had strong internal opposition. They also strongly defended Paraguay independence and at the end of the war had the hegemony in the Prata basin. To the degree that they managed to keep Argentina from having the whole Chaco region, as accorded in the treaty, and manipulated the Paraguayan government to keep them from signing undesirable deals with Argentina. All this while singing a unilateral peace treaty with Paraguay, which also went agaisnt the treaty.
The source is
Doratioto F. Maldita Guerra: uma nova história da Guerra do Paraguai., 2002.