After Lisanna died in the accident, it is understandable when one sees Elfman's apprehension/fear that he will lose control over his full body takeover again- the reason why Lisanna apparently dies.
I understand Elfman not being able to use magic, but Mirajane? She was an S-class mage. Why does she end up waiting tables at Fairytail? Did her magical prowess diminish after the incident?
Mirajane didn't exactly lose her powers. As Märmîk Šhâh said, Mirajane probably lost the will to fight from being unable to protect her sister despite being S-Class and being there. She probably stopped using magic because of this and thus her powers waned from not being used.
During the final Arc of Season 1, when Freed defeats Elfman, Mirajane's distress over her brother's suffering and being reminded of Lisanna's death causes her to join the fight to avoid seeing her family suffer for the second time. This is when she uses her Satan Soul, probably not as strong as it once was but she was an S-Class Mage and she retained that rank since the accident.
