my dog back legs give out?

My Australian Shepherd has diabetes. Her levels are all good and she is eating well. She has cataracts and very little vision but she manages very well in our home. She is 12 yrs old and recently her back legs get wobbly and she falls down. Basically her hind legs cross over and seem stiff. The problem is most noticeable after she has been sleeping, like her legs are a sleep, once she gets them under her she wobbles off with her sister thru the garden, circulation maybe? She also is easily knocked off balance, if the other dog bumps her. Our vet says the muscles are breaking down due to the diabetes. She recently had a bladder(urinary) infection that took two courses of medication to clear. Could this be connected? Any info that can be shared would be great.
When first diagnosed three years ago, Bailey's glucose level was 645, it took a few weeks to regulate her with Cansulin and the numbers have remained around 8 to 12. There was only one occasion (2yrs ago) that her numbers were very high and that was due to being at a kennel, they did not follow written instructions and did not contact our vet. Once home, I was only a few days getting her back on schedule and regulated her glucose levels. I check her at home weekly and the vet monthly. I too have considered age a factor and the ongoing diabetes taking it's toll on her body. Friends are amazed at our dictation. Our dogs are very important members of our family, both are trained for herding and agility but retired from competition at age 4 and 5 respectfully when I saw other dogs slightly older getting injuries. Because of their training and eagerness to please they have been excellent pets. It hurts to see her fall and then struggle to her feet. She shows no pain and never makes a sound.

Like in people, diabetes affects the peripheral nerves.  This means that the nerves are not firing as they should.  This and muscle wasting causes the weakness.  Make sure that her diabetes is properly controlled by monitoring her blood sugar.  Unregulated diabetes will cause this to worsen.  Sadly once this starts, there is no bringing this back.  All you can do is to try and keep the remaining function functioning.

When you say her levels are good, what does that mean?
under 150 ideally but 200 at least.