My understanding of DE is that the "cut and shred" is an action that happens to exoskeleton insects while the material is dry. It does not kill earthworms, in fact, it currently is in use by a great number of earthworm growers in their beds. It doesn't affect microbes or fungi, and if I've understood everything I've read, it doesn't do much of anything once it is thoroughly wet. So, what exactly is it killing that is so beneficial in your deep litter? Pill bugs? Roaches? Beetles? I can tell you from experience, DE does not slow down the decomposition of a compost pile in the least.