Insulin is an essential hormone in the body for a multitude of reasons and it has essential functions. However, it also has some significant downsides if there is too much of it. In order to understand why this is the case, lets delve deeper into how it works.
Glucose is an essential nutrient for cellular metabolism. It is the primary source of energy for short, explosive movements and is required in smaller amounts for longer, sustained exercise. The brain uses glucose almost exclusively. However, very little glucose can get into the cells of your muscles without insulin. There are glucose transporters (called GLUT-4 in muscle) that require insulin in order for them to show up on the cell surface. In the absence of insulin, these transporters are absorbed back into the cell. Thus, there is very little uptake of glucose without insulin.
So the good thing about insulin is that it drastically increases glucose uptake into the cell. But it has many other functions as well. Insulin can be considered the hormone of plenty. Insulin causes triglycerides to be deposited as fat in adipose cells, glucose to be taken up by cells, increase in LDL cholesterol, etc. Glucagon is the hormone in the body that does the opposite of insulin. When your blood sugar is low, glucagon stimulates glucose production from the liver. It helps mobilize fats as a source of energy. It helps get those fats into the mitochondria for metabolism.
Without insulin, you are dependent upon the metabolism of fats and this is one of the things that leads to diabetic ketoacidosis in Type I Diabetics. Insulin is also important for the function of acyl carnitine transferase (ACT) - the enzyme that transports fatty acids into the mitochondria where they are metabolized. Insulin deficient states (which, by definition, are glucagon rich states) increase the activity of ACT and you, therefore, burn more fatty acids. The by-products of this are ketones that can result in ketoacidosis.
Type I Diabetics are unable to produce adequate insulin. Type II Diabetics are resistant to the insulin they produce. There are numerous risk factors for Type II Diabetes. One of the big ones is obesity. I would also argue that prolonged exposure to high levels of insulin (as in a high glycemic index diet) may also be a risk factor but I'm not aware of any hard evidence for this.
This is why we should strive for a diet with a low glycemic index. It stimulates less insulin response and that is a good thing! Glucose ingested through food first goes to replenish your glucose & glycogen stores in the liver & muscle. Any excess sugars are converted to fat and deposited - this is what a high insulin environment does.
Insulin is essential but we need to prevent an excess amount. The paleo diet is a perfect example of a primarily low glycemic index diet - this is one of the many reasons why it is so beneficial. Focus on low glycemic index diets and foods. Your body will thank you.