Joseph, talmidei chachamim, especially of their stature, are considered to be in EY. However, if they would live here they would be much greater. Rabbi Zeira fasted 100 fasts to forget the Torah of Bavel.
Laskern,
1. The fact that the king does not completely follow the Torah does not mean that he is not the king (Sanhedrin 20b Tosafot d”h melech).
2. The Geula comes slowly in stages (Yerushalmi Berachot 1:1). Just as Shaul’s kingship was temporary (see “Kol haTor” of Rabbi Hillel Rivlin regarding Mashiach ben Yosef and Mashiach ben David as well as Rav Kook’s essay “Hesped b’Yerushalayim” printed in “Maamarei HaRaya”). It could happen that there will be a Torah republic in the future followed by a monarchy. That will not mean that the state has been annulled. L’havdil, France is now on its fifth republic but is still the same state.
3. The yetzer tov in EY is also much greater.