Good question! The cynical side of me thinks that using a method of eating that effectively controls diabetes in many type 2 diabetics wouldn't be too good for business for the pharmaceutical companies.
As for why hasn't low carb been used to treat diabetics...it has! My dad is a retired doctor (still kickin' at nearly 92) and tells me that when he was beginning his medical practice, the diet of choice for diabetics was low carb. Of course, it was also low fat (a detail that we still don't see eye to eye on, but he can't argue with my results after 3+ years). It was only with the advent of reliable insulin and oral medications that the diets for diabetics started changing to allow for more carbohydrate intake to where we have the ADA today telling diabetics that it's perfectly okay to eat sugar "as long as they cover it with additional medication".