Some T2's are lucky enough to find good control using the diet, exercise and/or medication appraoch, but there are some that will fall outside of this and require insulin, at what point is really a decission between the doctors and the individual as they would be the ones privy to the information required to make this choice..
Insulin does have a disadvantage as yes you are at risk of hypo's, but used correctly then hypo's and high should be limited risks, but still risks though... And there could be a time when injecting insulin and obtaining better control out wieghs the risk of trying to control with oral medication etc...
Sadly for T1's we don't get a choice we have no alternitives we've got to use insulin, it's only the delivey that some get the option with either inject or use a insulin pump!
And talking of insulin pumps, there's no clinical reason that a T2 who uses insulin can't use a insulin pump, in America T2 insulin users do have this option open to them..
Sadly here, pumps are difficult for T1's to extract out of the NHS, and almost impossible for T2's more so because it's not covered by the NICE guildelines, however saying that there are actually a couple of T2's using a insulin pump which are funded by the NHS, I think if I remember rightly that they are under one particular consultant though..