Arsenic is a poison. Lead is a poison. Cyanide is a poison. Tylenol becomes toxic at a certain threshold (like every other substance on the earth for that matter).
Sure, it is toxic to your liver in large doses. That isn't why Tylenol 3 is Schedule II while pure Codeine is Schedule II. The difference is in dosage. Tylenol 3 tends to come in doses of around 5mg Codeine to 300-500mg Tylenol. You get T3 when you have a tooth taken out, or maybe some minor stitches. You are also only given a few pills.
You get pure Codeine when you break a bone or stick a pencil through your eye. Or one of the stronger codeine-derivatives (oxycodeine, etc). These come in larger doses and are more prone to abuse.
Hence Schedule III.
I'm no fan of the DEA or the schedule system...but the "Government" isn't poisoning anyone. That's pure FUBAR and true tin-foil-hattery. Its a classification system for the abuse potential of perfectly legal drugs.