I only know her from an internet forum, but I think everything was fine - she'd had a very medical 1st birth, I think. I reckon you'd want an independent midwife or doula tho, personally.
Inducing early in twofold. There some evidence that the placenta begins to fail earlier in T1 pregnancies (I think the theory being that however well controlled you've been, it will still have been dealing with a wider range of blood sugar than in a non diabetic pregnancy). Secondly, size - again, however well controlled you've been, the chances of a larger than average baby are higher.
I was told that 75% of inductions between 38 and 39 weeks due to maternal T1 diabetes ended in c-sections at my hospital. They actually offered me an elective (1st timer) if I wanted to opt for it, knowing those statistics.
I was certainly allowed to drink water once in established labour, but not allowed to eat. Basically, the mw managed my diabetes for me, using the sliding scale.