If the PC's are doing this as a matter of course, then why don't cities like Greyhawk, or Waterdeep also do these things?
Because the author didn't think of it. They certainly ignored it.
This is not uncommon in most fantasy fiction. Especially TSR stuff where they'd bring in a guest novellist to write a murder mystery, and the next thing you know, the planet's 2 moons have been reduced to one and you can't swing an axe without tripping over Norway Pines and Irish Setters.
As such, the players really are the first to think of these ideas. Because the setting creators ignored it, they left it open to the players (GM is also a player).
If you don't like the direction it will take things, then you'll have to come up with nerfing reasons.
Otherwise, you'll have to accept that the players are inventors in your world and can change the face of it dramatically.
Here's some reasons that magic didn't transform the economy and industry of a stereotypical fantasy world:
- the general populace is wary of magic (plenty of real people are wary of gays and "other" religions, but that doesn't mean everyone is, just enough to discourage widespread acceptance and adoption of their ideas).
- various guilds block competition (lamp-lighters dont wantt to be replaced by Continual Light street lamps)
- Wizards not wanting to waste casting slots as a factory job (you could allocate Continual Light in all your slots or Melf's Acid Arrow and Invisibility, which would you choose)
- Wizards mystique, prestige and fear is maintained by not turning their art into a mundane, commonplace occurance. (unlike real life persecuted groups of people, wizards have greater personal power, keeping wizardry in wizards hands supports that).
- Physics, biology and chemistry in a fantasy realm doesn't work the same as the real world, because magic is incorporated into the functioning of it. Thus, pre-rennaisance medicine, physics, chemistry really is "how it works" because magic supplies the finishing support.
- Protectionism again. History is rife with examples of the trades blocking advancements. The spinning wheel was the devil's tool because it replaced 12 drop-spindle spinners. It takes time before any of these advancements get broader acceptance.