Turning off the report completely seems to be done through /admin/tool/analytics/index.php where you can use the Actions dropdown to disable the report.
It might make sense to consider the permissions structure for this. We just updated to 3.5 and had a nice surprise when a whole bunch of people received the "No teachers" insight email as they had Manager level access. We turned off that insight for now and I definitely do not want to ask each manager to turn off the email notification in their own settings.
I agree that this functionality requires more thought. Right now we have one capability that can be assigned -- or blocked-- per context. Anyone with that capability in a context will get all insights for that context.
What would be a better way of handling the recipients of insights? In general, I am hoping we can make the generation and tracking of insights more sophisticated. See MDL-62523 for the current proposal.