One of the most common critiques leveled at high-level NPCs in established settings is that they steal the spotlight from the players, and can serve as a deus ex machina, or otherwise take on the "real" threats while the PCs are involved with the lesser villains.
I don't find this to be such a problem if it happens off stage. Also, the deeper plots and menaces are often not even knowable by those beneath a certain level. Elminster is "away on business", and no further details are known. But there are some Zhentarim incursions that need looking into ...
The above problems can usually be solved by DMs following some simple rules:
1. PC's can hear about it; don't they rarely see it.
2. No deus ex machina. Deus ex machina's usually happen because DMs are afraid to kill the PCs, not because a setting has uber NPCs.
3. Have the uber NPCs say "Thank you." Seriously. This matters to people. Why do you think the Army hands out ribbons and medals (when truly earned)? Sure, King Azoun is a F20 and could have beat those bandits, and it's true he "just didn't have the time", but that doesn't mean he didn't feel bad about abandoning those people to their fates. It was only a cruel calculus that kept him away, and any time you're in Suzail please show my Seneshal this chit for fine food and luxurious rooms in the Palace.
-------------------------------
The Number 1, Best-All-Time solution for this though, in my experience, is to get the players to work on their own character's motivations and tell you (the DM) what kind of quest they're going on. "You've decided to clear out the Stone Giants, eh? Okay then."
Granted this may not work for everyone, but it works for me. The best part is that they pick quests like "Avenge my father's honor" or "Reclaim the lost shield of St. Great-Guy" or "Save the village where my friends and family live."; stuff that's important to their PC but not so much to any of the NPC hero-ish types walking around. The PCs simply don't expect help, or that if they sat around on their butt that someone else would take care of it. It's usually pretty clear that "Look guys, it's you or no one. If you don't save these people, they're gonna' die."
I've never had someone walk away at that point. The players are there to play D&D, and they picked the quest, so "Let's go!" is the phrase of the day.
What, then, is the proper role for the powerful gray-bearded wizard who's old enough to be the PCs' grandfather? What role can he, or a similar character play, that the players can accept and who also materially contributes to the plot?
Is it acceptable, for example, for the NPC to be the one to do the background research that points the PCs in the direction they need to go to find the MacGuffin, or to prepare the scroll they need to read to be able to weaken the defenses of the demonic BBEG, or otherwise provide exposition the PCs can use in making their preparations or otherwise carrying out their plans.
This is a role an NPC could play, but I would never have the Wise Old Wizard play this role. Research? Scribing? That's hireling work. Why don't you have him carry some torches while you're at it?
The Wise Old Wizard is long on wisdom and experience, and short on either time or health (usually, take your pick). Let him drop some advice, maybe make an introduction or too, and then let the PCs get on with it.
In my own view of the Forgotten Realms, say, Elminster really is a very powerful wizard who has lived for centuries beyond the typical human lifespan...but he's also a tired old man, feeling the pinch of age and burned out from the traumas of fighting for centuries against the horrors and evils of the world. He's become very crochety and irritable, and absolutely hates to be disturbed...but he will help young adventurers in need if they prove that their cause is just. He'll conduct the research, scribe the scroll, cast the divinations, basically the support work the PCs need to get the job done but is otherwise generally too boring for the players themselves.
Even going with your Alt-History FR, I just don't see that. Why would a dude who's 1000+ years old and really tired and crotchety do support work? That's 5th level wizard stuff. Either Elminster is too busy or too grumpy ("Get off my lawn!"), but not grumpy and schleppy. It just doesn't make sense to me.
Is this an acceptable role for a supporting NPC?
Like I said, for certain PCs, yes; for the Elminster you have described, no. The work you seem to expect them to do I'd expect from an assistant librarian at the Sorcerer Academy. One who's never seen the business end of a spear and doesn't want to.
What other kinds of supporting NPCs, like a king or prominent nobleman who becomes an ally or supporter of the PCs, exist, and what could they do that would be acceptable to your players?
There have been lots of good suggestions up thread. I'll just rattle off a few I've used recently that worked well enough.
From a 4E Keep on the Borderlands:
Warlord of the Dale, human Wlrd ~10. I haven't statted him out, but I imagine he's about 10th level. PCs were 3rd. Local hero, settled down, now rules from the sole castle. His big accomplishment as a young man was clearing the Keep of trolls and securing the northern half of the Dale for settlement by the peaceful races (those Lizard-men to the east are still a problem though). These days he spends most of his time training the guards that patrol the borders and charging out to meet incursions into the Dale. He admires the PCs for their youth and bravery and openly wishes he could join them in their adventures into the northern hills; but alas, duty calls. He provides martial training to the martial PCs for leveling up and good mead and food for all of the PCs.
Wizard of the Dale, human Wiz ~10. Former adventuring buddy of the Warlord. Has built himself a tower in the middle of the Dale. He established the Dale's and the Keep's arcane defenses and walks the edges of the Dale once a year to renew and strengthen them, but otherwise keeps to his tower. No one is really sure what he does. No one has asked.
From a 4E FR campaign in Gheldaneth, High Imaskar:
The Mystarium. A Gold Elf Fey-Pact Warlock of great power; he has openly defied the edicts of the Imaskari on multiple occasions, apparently without consequences. He has an abode somewhere in the ruins, but no one knows where precisely. No one even knows his real name.
Grazz Merr, a Thayvian pirate and crime lord. Tough and cruel, the PCs have not had many dealings with him yet. He knows the back streets well though, and is loyal to no one (which means he'll work for anyone, for the right coin, even the PCs). He stays bought.
Usana Ma'Teri, a Tamar Lawgiver of the High Imaskari. Unsana is a bit like Judge Dredd, except he flies a Dire Dragonfly and uses an Arbalast with exploding crossbow bolts. (Actually, that sounds exactly like Judge Dredd, now that I think about it). He's the only law enforcement that the High Imaskari Empress has deployed to Gheldaneth's poorer neighborhoods, so he's only got time to hunt "the big game" - Thayvian gangs and slaver rings, mostly. He doesn't have time for thefts, assaults, blackmail, etc.
---------
Granted, the Gheldaneth quest is more Grey Mouser than King Arthur, so the word on the street is "You're on your own." NPCs do what you pay them to do (sometimes), or whatever advances their own interests (often), and little else unless it amuses them - drinking and whoring are popular (always).
The PCs (1st level) are currently trying to track down who broke into one of the PC's father's smithy and stole his book of Steelcraft. There are big and bad NPCs walking around, but they just aren't going to help. Even the nice ones are busy trying to rebuild a shattered world; when it comes to saving the world, there's more work to do than hands to do it, as the old saying goes.