Don't be ridiculous... Disbanding of Imperial Intelligence does not fall under "day-to-day running". The Imperial Intelligence is what basically keeps the Empire together and is parallel in importance to Imperial Military (which is pretty much the most important element of Empire). If Emperor or DC wouldn't care about that then they wouldn't care about Empire at all.
The emperor has been silent for many years at this point, the dark council has had no contact with him at the time, so they have essentially taken control of the empire. This is the sole reason that the dread masters left the empire. So when the Dark Council saw (thanks to the star cabal) that II was chasing ghosts, that it was not helping the war effort in the slightest, because all their top analysts were focused on said ghosts, that at least one of their agents was capable of challenging a DC member, and that this same agent couldn't be brought under the control of the sith through mind control, they felt threatened, they felt that II was a detriment to their power, so they disbanded it.
on top of that, there is no way they could manipulate the jedi
Because Palpatine didnt manipulate the Jedi at all... eventually defeating them and making the new sith empire.