DE is hard on the lungs even the food grade. It is a very fine powder. I got some to use in the coops when I first got chickens. It is a nightmare of coughing fits since it is such a fine powder. I figured since it made me cough so badly and the hens were in there far longer than I that it could not be good for their lungs either.
It is also hard on the bee population. When the hens dust bathe they create quite a cloud and it drifts over my flower beds settling on the blooms. It acts as a desiccant and cuts their exoskeletons killing them. It is what makes it work on mites and lice but also has farther reaching results.