The don't lose their powers, they just lose supremacy (which is in and of itself a bit weird, since Havel is obviously a human and was a general and great friend of Gwyn, and there are other humans seemingly in high standing with the Lords... like the Four Kings before they fell to corruption and the rise of the Darkwraiths). Their power stems from their own souls, Gwyn was terrified of his "light", the First Flame, fading and giving way to the Dark and humanity, not of losing his power. More specifically, I think Gwyn was afraid of the Dark and humanity after what transpired in New Londo. (Also why would Gwyn care about other Gods losing their power as his motivation to effectively kill himself. It was far more that he was simply terrified of what could come not of what his supposed brethren might lose or gain from it. And by the end of it, you're just putting a tired and old man out of his misery.)
As for killing everyone, I meant that you kill what little was left of anyone. You kill Neato, the Bed of Chaos, Seethe, the Four Kings, and Gwyn (and then Gwyndolin and Priscilla). Guinevere may have run off but I don't see how that can happen without anyone noticing, nor would I understand why the Gods would abandon their seat of power and fortress at Anor Londo.
Anyway, back to the point, Lordran is a dead place by the time DS starts and the Lords have lost their hold over the world, and its just a decrepit shack falling apart at the seams. In BB, you're in a world that's still alive and ripe for the saving from the Old Gods who have a definite and firm grip over the world come the start of the game. Humans have lost control of their own world/lives in BB, and the Old Gods are manipulating everything to further their own species.
