I'm not sure if drinking water actually flushes anything out, but when you're high you get thirsty so water is nice.
My daughter has Type 1 diabetes. When blood sugar is too high, it can build ketones up in the blood which are potentially fatal if not treated. The way to get rid of these ketones is by lowering the blood sugar that caused them, AND by flushing them out via the urinary tract. When my daughter has ketones of ANY level, she has to drink at least 8 ounces of water every hour, and if they're high enough, she has to have an extra bolus of insulin to correct them IN ADDITION to the extra insulin given to bring down the high blood sugar. The water isn't so much to treat the blood sugar itself as it is to treat the side effect...ketones. The school nurse is absolutely right to give water, and I wish our daughter's school had a nurse, and especially one who's so in tune to the needs of a child with diabetes! Kudos to her!!!!