Sabrina isn't really psychic. Her reputation helps to create tourism, stimulating Saffron City's local economy. She was made Saffron City's official Gym Leader because challengers stimulate the regional economy. Her shtick is just a business angle, just like the martial arts of the Fighting Dojo next door is a business angle, albeit, one that has been totally outdone by its neighbor. The reason Sabrina does nothing about Team Rocket is because she either didn't know Team Rocket had taken over the city, or she did know, and was too afraid to get involved with criminals.

Alternatively, Sabrina really is a psychic, and had visions of the Player interfering with Team Rocket's raid. She decided not to get involved because she knew the Player would be successful and that the experience would make them stronger.