After Zeus defeated Kronos, all Titans on the losing side were punished. Atlas in particular was tasked with holding the celestial sphere for all eternity.
When Herakles later meets him, it's strongly implied that while Atlas isn't chained or anything, he can't leave his post otherwise the skies would come falling. But then, who held the skies before Atlas?
The following text is from the wiki:
Atlas and his brother Menoetius sided with the Titans in their war against the Olympians, the Titanomachy. When the Titans were defeated, many of them (including Menoetius) were confined to Tartarus, but Zeus condemned Atlas to stand at the western edge of Gaia (the Earth) and hold up The Heavens on his shoulders, to prevent the two from resuming their primordial embrace. Thus, he was Atlas Telamon, "enduring Atlas," and became a doublet of Coeus, the embodiment of the celestial axis around which the heavens revolve.
As I understand it:
a) In a way, its the moment in creation, that the earth is separated from the heavens (or the opposite). The punishment inflicted by Zeus, for the punished Titans to live in the world of mortals.
b) Atlas holds the celestial sphere to separate Gaia(Earth) from Uranus(Sky). If they united together once more, Gaia might start birthing titans again and the Olympian Gods see that as bad thing.
In both scenarios, they were not separated before Atlas.
According to the Theoi Project,
Hyperion, Krios, Koios and Iapetos--were posted at the four corners of the earth to hold Sky fast,
even though that was only for the murdering of their father, they were each rewarded a corner of the earth.
Before Atlas held up the sky Ouranos was still alive so basically he kept the sky from falling. But after Kronos over through, him Hyperion, Krios, Koios and Iapetos held up the sky from the 4 corners of the Earth that they were rewarded with for helping kill their father. Upon the Titans defeat, Zeus threw them into Tartarus. Then Zeus chained Atlas and told him that because of his great strength, Atlas would have to hold the sky up himself.
Hope that answers your question.
The conclusion above may have been too hasty. According to the Theoi Project: the four Titans, Hyperion, Krios, Koios and Iapetos held their father, Ouranos (Uranus, Sky !!!) by his four corners (their father was the sky!) while Kronos in the centre castrated him with an adamantine sickle. It was never their occupation to hold up the sky (Ouranos). This was just a single act, part of the castration. Holding the sky by the 4 compass points would just be a necessary aspect of the act of subduing the sky.
That the 4 titans represent the four pillars is offered in the Theoi Project as a hypothesis relying mainly on the notion of 4 pillars being common elsewhere in other mythic traditions. According to this inference the story of the castration and the four pillars share thematic features (homologation, in semiotic terms): the four directions of the sky; four Titans; their holding the sky fast; the presence in other mythic traditions etc. But the story is not referenced in the classical sources.
The notion of 4 pillars is, indeed, present elsewhere in other traditions (notably, in Egyptian mythology), and it's fair to make the conjecture. However, it is only offered as a conjecture and not proposed as something explicitly developed in classical sources.
Granted the myths are accumulations of various heterogeneous sources over centuries which are not always reconciled (the axis mundi, world tree, the cosmogonic division at creation, etc.). In the end, it's all just made up, so having sources is needed to lend credibility to an inference about a plot line. Recounting the myths is, then, essentially, about relaying the historical documentation that exists about those originals.
Though, of course, the myths can, and have been, reworked over time (in popular collections of myths, the stories are, even now, reworked to popular taste). Nevertheless, there is always a need to find original sources and give them authority.
The biggest problem, though, with this hypothesis is that the idea of the 4 Titans acting as the pillars is not present in, or compatible with the Zeus narrative in the Titanomachia. There is no fragment that elaborates explicitly even a partial narrative where the 4 titans are attributed this role prior to Atlas. The hypothesis appears to be based only on a plausible, clever, inference, an autonomous creation detached from any actual classical plot development.
For more see: Richardson, Hilda. “The Myth of Er (Plato, Republic, 616b).” The Classical Quarterly 20, no. 3/4 (1926): 113–33. http://www.jstor.org/stable/635771. And on line: Efthymios Lazongas Gates and Pillars of Heaven, The Architectural Structure of Cosmos in Greek, Egyptian and Near Eastern Tradition and Art.
