What do the GW gods actually do, or rather, what *can* they do?

If they really were supreme beings, they wouldn't really have much incentive to babysit one planet.
They'd be off doing other things, and the thought of popping in to say hi or tell anyone they are off doing other things would be an annoyance to them. It's probably why they have avatars to do all the work.

Melandru - This Tyria place is getting annoying. It's always 'we want this, and help us with that'.
Balthazar - I know what you mean. They need to solve their own problems now. They're big kids.
Dwayna - Let's just make avatars to guide them. That way they think we still give a crap, and we can continue without interruption doing things that have nothing to do with them without having to explain to them we are busy and with what and why.
Balthazar - Sounds good because I'm quite done here. That fight with Abaddon was a buzz kill too.
Greanth - Yeah, I'm done.
Melandru - Me too! Weeeee
Lyssa - I'm not. Psych! I'm just kidding. I'm finished. Let's get the hell outta here.
Pantheon - Woot!

*Exodus of the gods*

On the way back to wherever...
Balthazar - Did we forget something back there?
Melandru - There were still those big nasty dragons.
Grenth - I'm not going back. Besides, we totally imprisoned them good. I bet they'll stay that way.
Dwayna - Forget about it then.

The gods seem to avoid getting involved in the affairs of mortals. They did get involved once - they created magic and gave it to all the races of Tyria. A decision which turned into the greatest fiasco ever, which Tyria is still recovering from.

I'm not surprised that the gods left and never came back. The incident exposed them as being flawed entities; which would be extremely dangerous for them if the mortals found out.