I’ve heard a couple theories bandied about, but I don’t recall ever reading them in the original material (the old unfinished ad&d2e manuscripts). It’s been more than a decade since I’ve really read it, though.
Anyway, the first theory was that there was a barrier surrounding the dead lands that prevented the undead nations there from leaving. Again, I don’t think this is in any of the original manuscript, and in fact the pre-made adventure The Emissary involves Dregoth sending a caravan to Qwith in order to make an alliance for the purposes of invading the Tablelands.
Second theory is that the denizens of the dead lands simply don’t realize that all of atlas WASN’T covered in the obsidian deluge. None of them have ventured beyond their lands, because they don’t realize that there IS anything beyond their lands.
Another possible explanation is a further development of that second one. Namely, that the obsidian deluge that created the dead lands and the primary undead powers (the zhen) created some sort of link that keeps the Zhen focused on staying nearby.
Another thing to consider is that the humanoid powers that be within the dead lands are essentially locked in a stalemate with one-another, while at the same time locked in ANOTHER stalemate with the undead bug-nations to their south. They may just be too preoccupied to consider ranging beyond the dead lands.
I don’t remember one way or another, but I don’t think it’s clear just how long it took for the undead to claw their way free from the obsidian, so no way to tell how much time had passed between the creation of the dead lands in the cleansing war accident, and the establishment of the dead lands nations. It’s possible that once the primary factions/leaders were free that they DID look beyond the dead lands, saw a blasted wasteland that bore no resemblance to the green age world they once knew, and just gave up/didn’t bother looking any further while at the same time resigning themselves to their current state. Qwith’s domain, for instance, is entirely cloaked in an illusion that makes it LOOK like a typical green age fairytale kingdom. Even if all the citizens are a bunch of skeletal obsidian zombies.
There’s also the fact that the gate experiment that caused the cataclysm of the dead lands in the first place is still active/barely being held in check by a tree of life (the ONLY living thing in the entire dead lands).
Also “something” extra dimensional came through and exists within the obsidian (in 2e terms it was essentially some kind of uber obsidian elemental).
Also one of the leaders of the undead nations randomly gained the power to grant spells to his followers a la a sorcerer-king and is unsure what this means (basically one of the living vortices found a new host after Rajaat killed its host in the Prism Pentad).
Gretch is basically wasted potential. A preserver student of Rajaat who embraced necromancy, killed some students, made some abominations, fled the school (ironically, Rajaat probably would have approved of him and brought him into his inner circle if he knew), and turned himself into the first Kaisharga without realizing the ramifications (namely, in 2e, a Kaisharga STOPS gaining exp and is forever stuck at whatever level they were) and is now a blatant riff on Azalin from Ravenloft, lording it over his various failed experiments in necromancy and bringing life back to the dead.
The other primary movers and shakers have the barest minimum of characterization, really. Qwith gets the most as she’s in the adventure, but basically boils down to megalomaniac ruler willing to join forces with Dregoth because his emissary can puff up Qeith’s ego. It really seems at odds with Qwith’s prior characterization as a stabilizing force and brilliant scientist brought in to get Rajaat’s planar exploration experiments back on track and under control.