wikipedia: "In order to be effective as an insecticide, diatomaceous earth must be uncalcinated (i.e., it must not be heat-treated prior to application)[13] and have a mean particle size below about 12 µm (i.e., food-grade – see below)"
Its used occasionally for deworming people and considered a low risk insecticide. Just because you can eat it and it has some benefits in use cases doesn't mean you should consume as much as you can. Its the classic vitamin snake-oils sales pitch, "X is good for you thus more of X must be better for you"