The Swedes, who REALLY love their coffee, have been doing really high-quality research on coffee and its health benefits, or otherwise, for decades (even centuries), and have also researched its affect on diabetics. They have some research that even suggests that lots of coffee is good for diabetics - ie one sees health benefits with more than four or five cups a day, I think it was, but it might even be higher - I'm just going from memory here. And no benefits, but not bad for you if its a more humble 1-3 cups a day.
In fact, in Sweden they practically call coffee a health drink! (Saying it positively affects as in prevents cancer, nerve diseases, and heart diseases, as well as good for BG control.)
I too understand that there are other issues with coffee - ie the fungi that Brunneria mentions, and lots of its affect on adrenals and cortisol levels (which one would imagine affects diabetics), ditto on sleeplessness, as we know sleeplessness is not good for anyone let alone diabetics because of the cortisol-big belly-diabetes connection. (And I say this as someone seriously prone to a big belly - had one off and on for years - and as a serious coffee lover!) (Yeah - I can't drink coffee after 5pm without staying awake past my bedtime. But no worries if I stick to that.)
But being diabetic means so many beloved foods and so on are now on the 'off list' - I would get seriously sad if coffee was on it too! Especially when the Swedes keep saying - hey - go for it!

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There would be a revolution in Sweden if coffee was seriously on an 'off list'. Imagine living in greatly reduced hours of daylight without a lovely fairly-if-not-entirely-benign liquid drug?! (Coffee is great in greatly increased hours of summer daylight too!)
Yay Swedish coffee researchers! Yay for this fabulous liquid drug!
(all the research and findings come up with a simple google of 'swedish research and coffee'. There's a ton of it.)
This article says that coffee may not be good for those diabetics on insulin:
http://www.caffeineinformer.com/coffee-and-diabetes
but beneficial for those using diet and exercise as treatment.
But this is the big piece of research back in 2004, and is why drinking coffee is even suggested to treat T2D in Sweden -
http://www.ncbi.nlm.nih.gov/pubmed/15147528 :
CONCLUSIONS:
The results of this study indicated that high consumers of coffee have a reduced risk of type 2 diabetes and impaired glucose tolerance. The beneficial effects may involve both improved insulin sensitivity and enhanced insulin response.