In this stimulus, there are three distinct thoughts. The first thought is describing what other artists mistakenly think, which is used to set up the surrealist's point. The second thought starts with "although," so this thought indicates that the surrealist will concede something before arriving at her conclusion. The third thought, which is "using the power of artistic representation solely to preserve and reinforce objects that would exist even without artists is an ironic waste," is what the other two statements build toward, so this is our conclusion. In short, the first sentence is context/background, the first half of the second sentence is a premise, and the second half of the second sentence is our conclusion.
(A) says, "An artist's work should not merely represent objects from outside the psyche."
(A) rephrases the last statement of the stimulus. Merely representing external objects is a waste. The stimulus tells us that merely representing external objects is an "ironic waste." From this, we can tell that the surrealist is saying that art shouldn't merely do this. Thus, (A) is a great paraphrase of the last statement of the stimulus (which we already identified as being the conclusion of the argument), so it's the correct answer choice.
Does this make sense? Let us know if you have any other questions!