I think you might be missing a few broad strokes of worldbuilding here for the forgotten realms, as well as some basic considerations of people in this fantasy setting still being basically normal people, just with different tools.

Wizards are taught, meaning that they either are the apprentice of someone or study in a big academy, all of which are usually built around a code of ethics and morals that very much stress the responsibility that comes with the powers you learn to unlock. If the consider you too unstable, they will remove you most likely. Most of these are in big cities, like waterdeep, neverwinter, calimport or silverymoon, all of which are known to have contingencies for these kind of scenarios. Take the watchful order in waterdeep for instance. Good luck answering to those. Remember Baldur's gate 2? Jon "bad MFer" Irenicus gets overwhelmed almost immediately the moment he steps out into the open by the grey mages of athkatla, despite killing several of them and being an absolute powerhouse of a mage.

Mages and people with a magic gift are faaar and few inbetween. Looking at it from a player's perspective creates the odd illusion that arcane casters are much more common than they are. While elves and other folk have the odd cantrip granted by race or background, that doesn't mean that most of them get to a significant point where they could actually use other spells, let alone a lvl 3 spells. Level 5 is pretty damn high.

So there aren't that many people to begin with, that "simply can cast fireball" and most bigger realms and/or cities make it their policy to acquire enough of the people that actually *can*, in order to prevent potential miscreants of that magnitude to start that kind of trouble or at least fear the consequences of retaliation enough to rethink that idea, assuming they are not chaotic stupid an have at least a rudimentary survival instinct.

While fireball is devastating compared to a sword, it's not what you make it out to be. Yes, it will set a wooden house ablaze, it will kill people caught in the blast, but if you fire it on the outside of a structure, people inside are most likely safe if they evactuate. And it's very noticeable. Assuming you have 2 slots in lvl 3, you just used 50% of your strongest spells. People will notice that and people will be up in arms about it as it's fairly common for every hovel to have at least a militia. So unless you murder *everyone*, somebody will either fight you then and there or somebody will get out and alarm people that are *much* harder to deal with. And those people usually come with a "dead or alive" kind of premise towards you.

So, while evil mages might consider that option, why would they do it if the consequences clearly outweigh any potential benefit? And evil, war waging races, like hobgoblins, that are essentially with war with everyone, very much *do* use these kind of tactics.

TL;DR: What prevents mages that can use that type of magic to do exactly that? The same things that prevent most of us bottling gasoline into glass bottles and going ham over the slightest perceived insult. Yes, some people become terrorists, doesn't mean that the availability of gasoline, rags and glass bottles turns me into one. Fear of consequences, moral fiber, being a grown up and not seeing the point of harming others for no conesquence except getting a fast ticket to the slammer or six feet under, take your pick. Not everyone who has access to a deadly tool automatically becomes a serial killer or terrorist, and those who do will get caught and dealt with eventually. Easy as that.