I am pretty sure people's complaints about this sponge are due to what you mentioned- it grows well. Apparently, people don't want their sponges to grow big. Of course, in some peoples' cases, the sponge grew so big it started blocking the light from getting to their other corals, so that is an understandable complaint. Still, you can always frag it and sell it off, or just plan your tank wisely and put it at the bottom of the tank to begin with so that it can grow as big as it likes without you having to worry that it will block other corals from the light.
I don't know whether or not it is toxic, but I kind of doubt it, since ReefGen sells frags of it. I would think that if it were toxic, it would release those toxins into the water when someone tried to frag it, in which case ReefGen probably wouldn't be able to frag it, nor would they want to.