The US Army may allow it, but the CF has extremely strict guidelines for Canadian military personnel. In fact, if you get diabetes before you are career trained in Canada, that's grounds for a medical discharge from the military.
Given that CIDA is operating with the CF, they are likely compelled to follow our rules. While I sympathize with the plight of your sister (because she is obviously passionate about working in Afghanistan and heaven knows we need people like that), there are good reasons for the rules to be in place.
While our forces are very interoperable, the CF does not operate like the US Army. And CIDA does not operate like USAID in the field. Our operators have been patrolling further out and from more remote operating bases than the Yanks till very recently. This makes the provision of emergency medical care difficult. This factor does impact our civilian personnel, who while not out chasing the Taliban, follow our boys at the tip of the spear to some very remote and inhospitable places. In these situations, an illness is not an individual liability. A diabetic attack, or even an asthma attack can result in unnecessary risk or compromise a mission. For example, if your sister had a diabetic attack while the PRT was heading out the door, days or even weeks of planning, route surveying, mine clearance/route proving efforts, etc. could all be out the window. An individual having some kind of health episode while an aid convoy was in contact with the enemy (not a common occurrence but does happen) could compromise the security of military personnel who would now have to divert attention to taking care of your sister, instead of dealing with the threat at hand. Finally, owing to the fact that we don't have the resources in theatre, this often means we are borrowing or relying on our allies. While the Americans might be willing to service diabetic personnel with their own resources, for the CF this could mean taxing the resources of an ally, which creates a whole host of issues for our government.
The CF on the ground, relies heavily on CIDA members to help plan and deliver aid and development. It is considered essential for the Afghan mission to succeed. Given the footprint of our forces there and the tasks they are given, this means that even this essential mission component needs to have personnel that are at 100%, all the time. Non-standard risks are not an option at this stage (if they were operating in less spartan theatres there would be slack).
And there are alternatives. It's clear from your sister's comments that she was not turned down from foreign service entirely. There are countries she is eligible to serve in. Why not take up one of those opportunities?