Hi Angela. First and foremost - YOU HAVE NOT FAILED!!!!! Your pancreas needs an assist and insulin is a great tool for T2's.
Reducing the starchy carbs (potatoes, rice, pasta, grains, etc.) is a really good place to start, despite information you may have gotten to the contrary. This is your first line of attack on blood sugar. Concentrate instead on the really wide array of other veggies - salads, dark leafy greens, squash (summer and winter), cauliflower, kale, broccoli....this list is enormous. Use grains and legumes sort of as condiments - sprinkle a little Quinoa or some black beans over a salad for instance. Enjoy the foods you find around the perimeter of the store. Keep in mind that the lower the fat content of dairy products, the higher the carb count, so that should be a consideration in your diet. Forego dried fruit (bye bye raisins!) in favor of things like berries and reduced quantities of citrus and apples. Check out the Diet & Nutrition section here for tons of suggestions.
Here are a couple of books that will help you understand how insulin works: Think Like a Pancreas by Gary Scheiner and Using Insulin by John Walsh. These will help mitigate that sinking insulin fear factor. Knowledge is power! Your blood sugar is not horrible and I don't think you'll need much insulin to wrestle it into control. Weight gain should not be a problem with the tiny doses of insulin you're likely to use.
So....I am here to tell you that it will be OK. Good control of diabetes can make you the healthiest person in your family. So ironic!