Done for theavatar100 drabble community.
She could have helped bring down the tyrant, Ozai. ("These people need me.")
She could have been a hero. ("You can't just go halfway and then just leave!")
She could have been remembered. ("Sokka, you just don't understand! These people need me, I have to stay!")
She would still have a family who really knew who she was.
What was she now? An idol for a village that didn't even know her name. A myth that the elders tell the children of the village. ("See, there goes the Lady! What? Of course you can't see her face. She's a spirit!")
Alone and not growing younger, she sometimes wonders what would have happened if she hadn't been so tempted to stay behind. Then some event in the village would need her attention and she'd forget her wondering for the moment.
Katara didn't make herself the Painted Lady, the villagers created that persona for her.