In response to the intracellular famine, the body switches on gluconeogenesis, which is fundamentally the creation of glucose from non-sugars - things like certain amino acids, lactate and glycerol can be used. But our reader now asks a perceptive question: what's the point of this, when diabetics already can't use most of the glucose in their bloodstream?
I think that the question rests on a faulty assumption, however - namely that what the body does in the case of diabetes is 'adaptive' (i.e. is an appropriate response to the crisis). A process like glucose homeostasis (keeping blood glucose levels within the right range) isn't intelligent, of course. It seems to be doing a good job most of the time because it has been programmed by evolution to do so over the millennia, but if something goes wrong it can suddenly look rather foolish.
I think that's what happens in diabetes. Normally, if the intracellular concentration of glucose is diminished, this reflects the fact that the whole body is short of glucose too (for why would much-needed glucose normally not enter a cell?) This sort of thing might happen when we haven't eaten for a long while. And so the appropriate normal response to intracellular hypoglycaemia would be gluconeogenesis (and glycogen breakdown), which would raise blood glucose levels and thus provide more glucose for the cells.
However, this plan is really blown to pieces in diabetes. Intracellular glucose levels are low, as before, and the body reflexively goes about trying to rustle up glucose from wherever it can. The fact that extra glucose is nearly useless to the diabetic body is besides the point - glucose homeostasis is a blind process, devoid of intelligence and insight. It was programmed to be adaptive under normal circumstances, and diabetes violates this assumption. And so the whole house of cards tumbles down.
Actually, gluconeogenesis is worse than useless here. The high blood glucose levels in diabetes are the major cause of death, and gluconeogenesis makes them higher! But again, this is the unfortunate consequence of an assumption made by the body ("intracellular hypoglycaemia means extracellular hypoglycaemia too") that no longer holds in the pathological state that we call diabetes mellitus.