In my experience, fear of spies is the major reason why those in power in realms hesitate to add people to planning councils. I have had personal experience with cases where people have spied on our realm with absolutely no discernible IC justification for their actions. Like the guy who's been in your realm for three months, says almost nothing but posts some scout reports, never disagrees with any plans or policies, and then you find out he's been sending your army order to your enemy the whole time.
I can understand the attractions to gaining info from spying, or the possible thrill from running a "spy ring". But personally, I think it has an overall negative effect on the game.