The Imperial Court in Kyoto effectively ran on tribute; it produced no actual revenue of its own. The theory was that the Emperor was supposed to effectively give away the land to the daimyos and samurai in what was supposedly his land, and receive taxation from them. In turn, he would govern (which effectively meant overseeing various religious and cultural responsibilities; the daimyo took care of their land and armies). The problem with this system was that not having any land and any armies essentially left the Empire in charge of the daimyo; this effectively meant that any daimyo who possessed the area around Kyoto had the power of life and death over the Emperor, and could effectively force him to declare that daimyo Shogun or otherwise let the Emperor starve. It was an essentially feudal system (although plenty of modern historians shy from using the word because it's so nebulous), except that the Emperor lacked the control over his own subjects needed to make Japan a monarchy and not a fiefdom.

Up until the Genpei war the Emperor and the court in general did in fact have a large amount of power: what happened was that two clans with strong influence in the imperial court, the Taira and the Minamoto, clashed with each other. They fought a brutal civil war which ended with a Taira retainer grabbing the child Emperor and jumping overboard a boat, and an ensuing Minamoto victory. With the Minamoto essentially in control of the Emperor, they had themselves appointed the role of Shogun, which historically was a general that was responsible for launching expeditions against the Emishi in the northeast. This gave them essentially dictatorial powers. Once in control, the Minamoto started to redistribute power and territories to their loyal vassals, and in doing so set up the system which rendered the Emperor as a mere figurehead for some time.

This isn't to say that the shogun was the be-all or end-all, however. Another clan, the Hojo, inflicted a similar state on the Minamoto for a time-turning the shogun into a figurehead for their administration, which lasted until an attempted coup by the Emperor Go-Daigo that resulted in the Ashikaga clan taking control and establishing the Muromachi Shogunate.

I can't really speak to the root cause of this phenomenon, aside from saying that for more or less a millennium through to the Meiji Restoration, the Japanese Emperor wasn't politically consequential, though he did serve in religious and cultural roles.

The "real" emperor, as it were, was the Shogun, who was essentially the most powerful clan leader (daimyo) in Japan, having had this power legitimized by the largely ceremonial Emperor. All daimyo were loyal to the Emperor (he is, after all, a descendant of the goddess Amaterasu), but would often fight amongst themselves, jockeying for power, hoping to become Shogun.

When you can exert your military supremacy throughout Japan, you can certainly get what you want from the Emperor.

I wish I could give you more info than this, but I am sadly limited to a Meiji-to-present introductory level of education.

Source: Andrew Gordon, A Modern History of Japan: From Tokugawa Times to Present