Balance of nutrients
The first thing to note about the need to limit sugar and carbohydrates is the fact that these substances usually need to be curtailed and balanced with other nutrients, rather than being banned from the diet outright.
Diabetes is the main problem. People with diabetes need to keep their own blood sugar (glucose) levels balanced instead of relying on the body to do it by producing the hormone insulin. In Type 1 diabetes, the pancreas stops making insulin. In Type 2 diabetes, the pancreas makes insufficient insulin, or the body has trouble making it work (insulin resistance).
Diabetes, in whatever form, is always a complicated problem. If not properly managed, it can lead to organ damage, heart disease, stroke, foot amputation, blindness, kidney failure, and a host of other issues.