We know Luna started to grow extremely hateful of Celestia and transformed into Nightmare Moon, which likely took a long time, but we dunno whether Celestia did shit to help it. Like, if it took months, it's not like Celestia didn't have -any- chances time-wise, but a new question has risen: whether it was -possible- to do anything. If it -just was- -too late- once Luna's downhill started, then all Celestia could do was see how shit ends up, and the result was the banishment.



Discord is a big problem, as you should know: he's most likely the most powerful magic user alive, who doesn't break a sweat doing something over long distances, or something massive. We're not shown, but I'm willing to bet Celestia and Luna had fought Discord before more than once and were hardly able to defeat him, then were able to use EoH which just might be the only thing stronger enough to work on him.



Well, prisons aren't exactly the best punishments (ppl should know that from the real world), and in a world like MLP and Equestria it's a hard job to find workers for for a couple reasons:

1) You can keep Earth ponies and similar creatures in check since all the pros they have is their physical strength (equines have very destructive bucking power, but you can create stuff that makes it useless, and bucking is a pretty slow process), but make it a Pegasus or similar, a unicorn, or worse yet, an Alicorn and simply keeping a tight eye ain't enough, especially if the workers are Earth ponies or similar themselves. Or, hell, place someone like Discord in a prison and you get impossible. Just wing restrainers and magic suppression rings on the horn (you can't use one on Discord) aren't enough.

2) Ponies get cutie marks and the cutie marks define what they'll do, or are supposed to do, for their life. That leaves pretty much every other species the proper workers, and they live far away.