I agree with you that it sounds scary to shut down kidney function. Any time you throw a medication into a body, it disrupts lots of systems and has many effects that you might not see the results of for years. Especially in developing children, I would use the utmost caution before administering any medication.
Hypnotherapy is a safe, gentle alternative solution you can look into. Think about what controls sleep and waking and bladder function...it's not the conscious mind. Dealing with things on a conscious level won't help. The subconscious is everything below the level of the conscious mind. It's really fun for kids and the results are amazing.
You can try this--have him relax and close his eyes, and imagine his brain as a computer. When his bladder is full, it sends a signal to his brain that it's time to pee, and this signal works perfectly all day long. Then at night, the computer has a little problem and the signal doesn't get through. So have him program the signals to work perfectly every night. Have him imagine the cables and the buttons and have him work on it. All the circuits from his brain to his bladder and bladder to brain work perfectly. So either he will hold it all night or his computer will wake him up. Have him take some time with this exercise, and then have him imagine what it will be like now that it's fixed.
Then at night before bed, have him program the computer again, maybe giving himself a button or dial, and have him make sure everything is working. Have him imagine waking up in the morning dry and happy and very proud of himself.
This may be something that needs more professional help, but imagination can solve many problems on its own. Vividly imagining what he wants can bring it to him. It's got no side-effects and is worth a try! If you do decide to explore it with a professional, look for one in your area that works with children. They don't have to be PhDs or psychologists, just experienced with kids. Good luck to you, and it's so great that you're exploring options instead of just doing the medication. He's lucky to have such a conscientious mom!