From what we've seen of Sharlayan, they tend to be a lot more interested in hoarding said knowledge than actually using it. When faced with a possible conflict with the Garleans, rather than stick around and use their incredible magical and technological knowledge to fight, they just kinda... ran off back to their island. Hell, from what we can tell, the Garleans never even got CLOSE to Idyllshire, and yet they evacuated the whole damn area "just to be safe". They'd rather abandon an entire city than even risk the possibility of being involved in such affairs.

Nations with such intense policies of neutrality and isolationism don't tend to become big world-conquering empires.