As of right now, disciplinary roleplay is the bulk of what the council does (outside of events, or when individuals choose to contribute in other ways on their own). That said, it would be inaccurate to say that it's objectively boring. I agree that some people can certainly
make it boring, but is more to it than you've described. Discipline doesn't have to be hunting students down, sitting them in the detention room, and silently watching them as they do homework. You could try interacting with or counselling the students, to see if something's up that's causing their behavior. You're not going to "fix" anyone with just one conversation, but if the student is willing to work with you it can make for some interesting roleplay regardless.
I won't go as far as saying that it's the best thing ever, because sometimes it does suck. People can be difficult OOCly, either by being unrealistically uncooperative ICly or just FailRPing. It's definitely not the type of thing for everyone, and that's okay.
There are new players wandering around all the time that could probably use some in-character help to get a decent foothold on the school aspect of the server. It wouldn't be difficult to occasionally fun little seminars in the council room to get them accustomed to roleplay. Helping people doesn't just mean helping when somebody is breaking the rules, it applies to little things, to.
Supervision does not equal discipline, discipline is just one aspect of supervision. To supervise is to observe. Watching the students to make sure they're behaving or to help them if they are struggling is certainly a part of that, but it could also mean a lot more; the council could be watching the teacher as well, to make sure nobody's being domed in the skull with a collapsible metal chair. It could mean going around events, helping out if something goes wrong. It could mean getting involved with club and sports meetings, to ensure they are doing what they're meant to or just getting involved. And in all of these cases, there is opportunity for you to roleplay and interact with other people. Is one of these people being naughty? Talk to them, see what's up, and compile an official report if necessary.
I wouldn't go as far as saying it will "destroy" the council, but I agree that it could make things more difficult, at least initially. Personally, I would prefer
this proposal instead (which I didn't know the link for was broken in the original post, damn you SRP forum filter), as then we would have the functionality of both, all under one role, while still maintaining individual focus on each important aspect of the faction. The reason I didn't outright suggest them to "remove prefects, my idea is better" is because it has been just a few days, and we haven't seen much from them. Things could get better for them, we don't know.
That said, assuming the council and prefects stay separate, I think the pros of re-evaluating what the council is and giving the disciplinary related tasks to the prefects will outweigh the cons. It will give prefects more to do than be hall monitors and tattletales, and it will allow the council to focus their efforts on contributing to the school experience.