The story about the insulin pump seems rather unethical, almost as if she is performing research on a human child when they are not of the age to consent, and would be biased toward consent due to parental influence.
Source: A friend of mine is part of a insulin pump hacking community
But all things aren't equal. Most of the people doing the hacking (I know a few as well) are already intimately familiar with the biology and consequences, and are already constantly monitoring themselves, or their children and loved ones. They're the best people to test this stuff.
And, like you said, there are compliance issues with children and all sorts of bad things happening already, like devastating lows, diabetic comas, chronic sleep deprivation, etc. The closed-loop and automated systems already reduce these things and improve quality of life for all parties involved. Also the companies are taking forever and may have a vested interest in maintaining their products the way they currently are.
If all things were equal, I could understand the disdain and caution for the device hacking. But they're not.
It was just yesterday that an (adult!) allistic friend of mine was posting on Facebook looking for advice on treating her kidney infection without antibiotics. Her irrational allistic friends were giving her all kinds of ridiculously terrible medical advice (“Alka-Seltzer cleared up my UTI”), and I looked up the clinical practice guidelines and yelled at her to GET ANTIBIOTICS.