Hmmm.. I've seen no reference to it being "toxic". Toxic specifically means poisonous.
This appears to be the same reference you are using, but it specifically states "non-toxic":http://householdproducts.nlm.nih.gov...ds&id=16003386
There's nothing here about the stuff becoming toxic at any stage.
Where did you get that idea from?
The hazard appears to come from it's mechanical properties.
Naturally, any abrasive will be an irritant if applied improperly and any sponge would pose an intestinal blockage hazard if ingested. These are not "toxicity" hazards.
>>I think I would just use paint to cover up the walls and switch to washable crayons to be used under strict supervision only.<<
Ha-ha! Oh, my! You do have a young one, right? And only one child so far?
Well, I hope that works for you! It's a nice idea, and it certainly *sounds* logical, but around here, it's just so implausible that it's funny.
Not to, um, burst your bubble or anything.