Sulfonylureas have been around since the 1950s and there are multiple generations that have evolved over time. I'm not suggesting that they're perfectly safe, but there is no conclusive evidence to prove either side of the argument. Furthermore, I have to wonder, what is the alternative?
I would tend to agree with most of your thoughts, but they require the assumption that everyone can control their T2 diabetes with diet. Obviously, it doesn't make sense to overmedicate someone, but when diet, exercise, and metformin aren't successful, what would you suggest be done instead?
The general approach is to try diet/exercise, then introduce metformin, then sulfonureas, and then insulin. Of course, there are other approaches as well, but that's the general progression of treating type 2.