Milk is food grade, but inhaling milk into your lungs would be really bad for you. Plus, not everything that's sold should actually be sold. Food-grade activated charcoal isn't technically bad for someone, but will absorb any oral medications they've recently taken, including life-saving meds and birth control. Scented pads and tampons exist, but, without going into details, can cause someone serious issues. Essential oils can be hazardous if not diluted properly, and many are toxic to pets, but they don't mention that on the bottle most of the time.
And animal supplies have it worse! Hamster balls are stressful and dangerous for hamsters. Rawhide treats for dogs can be a major choking hazard. Heck, you can go buy a goldfish bowl right now, even though goldfish grow to be longer than most of those bowls are wide. The human-related FDA is bad enough about regulations, animal regulations are worse-to-nonexistent. Things can be sold for a purpose without actually being good for that purpose.
You don't need DE, anyway. Just give them dust that includes wood ash, and it'll be fine enough to suffocate the parasites. Heck, regular dusty dirt would help. Plus they like it.