Good question!
I have had diabetes for over 45 years. The first thing about "sugar" is that refined sugar, which I think you are referring to, is a carbohydrate.
So you should understand that "sweets" are just part of what someone with diabetes needs to manage because carbohydrates are what affects blood sugar levels. Refined sugar, like in sodas or donuts or candy just affects blood sugar faster.
The amount of carbohydrates any person needs, including people with diabetes, depends on several factors so there can't be "limits" that affect everyone.
Your friend with diabetes that eats a lot of sugar is being irresponsible, probably because of a lack of understanding of health and diabetes, unless he or she is having low blood sugar.
Refined sugar in the amounts that the average American eats is unhealthy, diabetes or not!
Check out this article on carbohydrates, it's easy to read and is in plain English:
http://www.improving-health-and-energy.c...
Cheers,
BB