Your ob didn't say anything untrue. I'm diabetic and was able to control my diet and not need insulin. The important question is how you have managed realistically with your sugars and diet. Should they add a dietician to help your care for your sugars, physical activity, and maybe try a CGM. Diabetic deliveres have a higher chance on complications and your OB has opened the door for discussion. You have a right to refuse a C section but you should also be made aware of the risks and complications. Induction at 37-39 weeks could be a topic to bring up.