More importantly, didn't the Earth King ditch the Dai Lee? Or, they were sort of gotten rid of? I suppose we never got confirmation in the show. Azula brought some back with her, but I guess that's about all we got on it.
Earth Queen brought them back, I guess.
Kuvira either killed or reeducated them I would assume.
This is a question that entered my own head as well after awhile. The Dai Li were basically the CIA of the earth kingdom and even in season 3 they were going strong and continuing with their own secret projects to maintain the social order and "culture" of the earth kingdom via social engineering and trying to weaponize and hypnotize people like the air benders in S3 or Jet in TLA
While they ruled the city from the shadows, it's not like the complete upheaval of social order would stop them since they have no qualms about force and violence in addition to coercion. In circumstances like when Zaheer set off the looting spree the Dai Li probably could do little to stop that, but those in the inner circles are dependent on both the military and Dai Li to maintain that separation from the lower rings. It would surprise me if at least some order didn't come back to Ba Sing Se after awhile.
The flip side however is that the Dai Li has probably never been extremely large so the moment no one fears repercussion from the government, the Dai Li lose most of their power since the Dai Li relies on the fear of their reprisal, since they don't have the actual numbers to martially control the city, they held it in place psychologically.
Toa should be pleased with the following head canon:
At the start of the campaign to help stabilize the earth kingdom during the 3 year timeskip, Kuvira is still the ambitious captain of the guard for Zaofu, and after pleading with Su to intervene she decides that she'll do it herself.
She makes her first speech in Zaofu and several members of the guard along with Batarr jr, are inspired to action and they all leave together to tour the earth kingdom and try to bring order back.
In the anarchy caused by the power vacuum and the fracturing of earth kingdom states, the rail system has broken down and Team Kuvira has to make their first do-gooder stop. They crush some local bandits only to find out that those bandits were former earth kingdom soldiers.
It's clear that the chain of command has been broken and the earth empire really is in disarray as officers with command power are insubordinate to Ba Sing Se generals (who themselves are not especially competent due to say, nepotism on the part of the earth queen/dai li in the selection process.
From here Team Kuvira resolves whatever situation is in the city/town. Have the town mayor actually give Kuvira metal to fix the rail way, and Bataar can do some kind of engineering stuff. Before they leave show a ragged orphan girl thanking Kuvira for bringing peace to the village (SEE THAT FORESHADOWING?) and some kind of close moment happens either with her and the little girl or Kuvira and Bataar (or both) to strengthen her resolve to save the Earth Kingdom.
They go on along the rails and from the windows of the hope+freedom maglev train they can see all the destruction and famine and have to turn away from stopping at every place they can because they're not strong enough yet. That or have some more people try and steal their train since it's made of fancy zaofu metal only to have team kuvira be forced to retreat due to overwhelming numbers and continue on.
Stuff happens yada yada yada...
They finally get to Ba Sing Se and they go to the inner circle to see what's left and to try and rally the remaining generals. They're apathetic and basically under constant siege by the commoners in the outer ring and so all the military in the inner ring is spent protecting the wealthy families, among them Wu's family and other royal relatives.
Kuvira sees all this and is beginning to lose hope that things will come together...
CUE THE MOTHERFUCKIN DAI LI.
They whisper in her ear about power, and all that jazz. She meets in some secret underground bunker where most of the Dai Li is still chilling having been forced underground.
They tell Kuvira they can give her the support she needs to start rebuilding and reuniting the earth kingdom. They have an troves of secrets, wealth and a distributed (albeit now patchy) network of of spies and propagandists who can build her up.
She accepts the faustian bargain.
Kuvira goes and tours the upper ring and meets Wu's family and other court officials and what have you (this is a good time to maybe have the royals show they're still out of touch with the common people, via appearance, or by fawning over the fact that Prince Wu is next in line, etc) show kuvira as being inwardly disgusted that people of the upper ring are still as they are, while the Dai Li can quip that they're easier to control that way.
Finally have Kuvira sent out on a mission in cooperation with the military to take back some other zone, at which point the propaganda of "Kuvira the Great Uniter" starts showing up.
Something else happens by her spending time with the Dai Li up to the point that Kuvira finally pulls an Azula and boots the Dai Li out of power (Preferably MGS Big Boss style) with a rad speech and soldiers and common people rallying around her as the "great uniter".
This shifts the balance of power in Kuvira's favor as a few states willingly join her at which point Bataar starts doing major logistics and realizes the Earth Kingdom needs to be modernized, which requires materials and labor, at which point reality begins to set in and Kuvira starts to borrow from the Dai Li playbook as hard realities oppose her grand ambitions.
BAM. Kuvira is now a better developed villain.
I'm not sure where Bolin and Varrick and Zhuli enter the picture, but they're not as important to the whole and can really be inserted at any point.
Bryke if you read this, you can credit me in the back of the eventual Kuvira comic that dark horse publishes.
You're welcome.