Many people are aware that Type-2 Diabetes involves failure of the insulin producing cells in the pancreas. Many people are also aware that Type-2 Diabetes involves insulin insensitivity. Insulin insensitivity produces increased inflammation. Many, many health websites describe how Type-2 diabetes exacerbates inflammation in the body.
Much less well publicised is how the chain of causes also runs the other way. In fact, peer-reviewed studies document the causal role of pro-inflammatory agents and immune suppression in the pathogenesis of type-2 Diabetes. Both increased inflammation and immune suppression are involved in the creation of the type-2 diabetes condition. Together, inflammation and immune suppression form the main mechanism whereby the pancreas fails.
Chronic sleep disturbance produces a very strong and lasting form of stress. This long-term stress sets in motion an undesirable chain of events. The body increases production of pro-inflammatory agents. It also suppresses the production of leukocytes and other immune-response cells. Effectively, the stress suppresses the immune system and increases infammation.
Thus chronic sleep disturbance produces increased inflammation and immune suppression - all over the body. But those are the same two causal factors making the insulin producing cells fail. So chronic sleep disturbance is a major contributing causal factor in type-2 Diabetes.
So if you get good sleep then it's OK to eat more sugar? No. High blood-sugar levels also produce a significant inflammatory response. But if you do continually get good sleep your body will definitely thank you. And your organs won't help you to damage them as readily.
As a side note, in a similar way, obesity is also an inflammatory disease thoroughly exacerbated by sleep loss.