Whether to reproduce or not when you know you have something that can be passed on is a very, very personal choice. I don't think someone is wrong for not wanting to have children because they have diabetes, but I also don't think someone is wrong for WANTING to have children.
My father was a T1 and, yes, I inherited his lazy pancreas. BUT, is my life horrible?? Absolutely not! I have a wonderful life, tons of things that I enjoy, and access to all the stuff I need to stay alive. In some ways, having T1 has made me SO MUCH stronger than the average person. I live life harder and strive to do many things simply because I know some folks think, "Ah, she's diabetic. She can't do that!" I have traveled the world, run marathons, and done a zillion other things that most "normal" folks would never dream of doing. OH, and I'm probably a 1,000 times healthier than the perfectly healthy person. Having T1 has made me much more aware of things like food and exercise than I probably would have been otherwise. Kind of ironic, but that's the way it is.
Another thing...there are plenty of non-diabetic parents who have diabetic children and plenty of T1s who do not pass the condition on. How T1D is inherited/passed down is largely unknown, as it what triggers it. It's not like other genetic conditions (cystic fibrosis, sickle cell, hemophilia, etc) where the pattern of inheritance is defined and well-known. That said, I don't think it's fair to tell someone they should not have children just because there is a small chance that their child will also have T1 (and the chances are actually very small, even smaller when the mother is T1 as compared to the father).