That's assuming it's a rain-based flood type sinking. Does Control Weather work on Tsunamis? If you REALLY want to flood it though, you erode the land under it, so it just goes SPLOOSH into the sea and there's not a lot Control Weather can do about it. :D
I think they CAN, they just aren't supposed to mess with other gods' clerics (or maybe that's "interfering in Divine Politics") and they are not supposed to go into the other pantheons' turf at all. But on their own turf and in their own Domain, they are allowed to mess with the Material Plane until someone stops them within their rules.
I think it's more that this is a game to them, and it's less fun and interesting when you cheat all the time. So assuming direct control of large scale mortal events probably got boring after 2 or 3 easy wins, AND would have to balanced enough that it doesn't tick off the other Gods enough that they come and thwart you over it. Because that could lead to Snarls.