Yes, there are other medications that will help to lower blood glucose. I'm not sure that the metformin "stops working" - it might be that the carb intake has increased, glucose levels have gone up, and any gain from the metformin is now negligible. Unfortunately a lot of the treatment offered by the health service is simply more and more glucose-lowering medication, without really attempting to do something about diet and lifestyle. I think there's certainly a place for medication, but it shouldn't be the first and only thing on offer.
My preference has always been to do without medication wherever possible, and I didn't appreciate being offered metformin at the point of diagnosis.
The body's response to cells becoming insulin resistant is to produce more insulin. Taking an injectable insulin follows the same principle. It's not that the insulin simply doesn't work - it's that it works slowly and erratically, for example. If insulin didn't work at all there would be no energy available to your body from glucose, and in general you'd be in a very bad way.
This is why the blood test before and after eating is so informative. If you're not back somewhere close (within 2 mmol/l and not above 7.8mmol/l) to where you started after two hours, it shows that your system is having trouble shifting glucose into muscle cells for fuel, so there are still high levels of glucose in your blood, which over time can do damage - for instance, neuropathy. Adding more insulin can help reduce glucose levels in the short term, but at the same time can tend to increase insulin resistance even further.
The low carb approach (by reducing carb intakes and therefore glucose) reduces the need for the body to produce insulin, so firstly levels of blood glucose are reduced, avoiding physical damage, and secondly, the muscle cells have a break and a chance to recover some insulin sensitivity. They may start to deal a bit better with whatever glucose there is around.
Overstressing the cells by having too much glucose in the blood leading to higher insulin production is likely to increase insulin resistance all over again, so low-carb is not a "cure" - it is (for me and others) a way of managing the condition long-term.