No dispute here. The New Covenant is meant to rectify their disobedience, a disobedience that got them expelled. (Though historically there have always been some Jews living in the Land.)
I'm not an expert on this from the perspective of Israel, but I'd leave that to Paul and Peter's comments, and I'm unsure they'd agree. I think they'd say the New Covenant is meant as the logical outcome of all the covenants, even the interim, era of Israel/Judah/Judea.
While it's to rectify the disobedience of Israel, it's actually meant that for everyone. The Babylon and then the Roman expulsion was an issue of disobedience, sure, but not one of such profound terms as losing the covenant. The Mosaic covenant wasn't exhausted on those grounds. Expulsion is really an interim issue.
The New Covenant deals with sin in a much more pervasive way. Prior to this there were sacrifices looking forward to the True Sacrifice, but signposts, "It's on its way!"
When the signposts were mistakenly taken for the reality, that was the time the Messiah came. That reality was upsetting, and people clung to the signposts to save them. The signposts gave way under the pressure of dependencies they were never built to support.
But they're still signposts, many are still out there, they still have a purpose.
Paul himself says Gentiles are grafted in and part of the Commonwealth of Israel. This is how Gentiles participate. But being part of the commonwealth means following its Laws.
There's little doubt in my mind that Paul doesn't mean the (then-extant) nation of Judea's political government. They're not going to follow the Mosaic Law verbatim, either. See Acts 15, Peter's comments, and Galatians 2, when Paul confronts Peter. The arguments prevent this understanding.
I think Paul realizes he's not creating a new government along the lines of Judea. I think he sees Judea as corrupted by Gentile influences, and not the kind of nation God wanted in the first place. I think he sees this new nation as radically different, "
not of this world", and we as ambassadors of it.
However, the Apostlic arguments don't topple the Law, either. Romans 3:31 should be a touchstone of the fact that the Law remains. Why? Why would it remain, when Peter and Paul are saying certain harsh things about observing its ceremonies and government? It's because the Law reveals sin in us, and morality as God intended. We use the Law by comparison, not by compulsion (Rom 7-8), knowing all the while that defiance of the Law is morally deadly. We can look into the Law and with the work of the Spirit of God, we discover true morality and where we don't measure up (2 Cor 3:12-18). And by relying on God the Spirit, submitting to Him from the inside out, we are transformed into the greater and greater glory -- such beauty! -- of what the Law
intended -- not simply what it said (Gal 5:22-26). So the Law doesn't change -- we change, and the Law approves and has no penalty against the changes the Spirit is making.
But ... that is the New Covenant. It's an agreement sealed in the Blood of the Savior, binding us to God and one another in promises, laws, and relationships.