The DE filters have been around for quite a while. I remember seeing them in the late 70's being used to quickly clean out retailers tanks.
In theory it probably would work well for free floating parasties including Ich however, the chances of it removing bacterial problems may be limited.
Also as stated, what about pods and such that are beneficial to the tank and it's inhabitants?
I think it would probably make a great 'main filter' for a QT tank as it would eventually remove anything that might happen to come in with your 'fish'.
I'll assume that when you suggested treating fish with it you may have been toying with the idea of introducing the DE powder directly into the water of the tank?
I think it would simply amount to Asbestosis for your fish in that practice. Like Asbestos in humans the damage is the actual sticking and non-removal of the mineral fiber which causes the damage. Essentially the fiber really doesn't do anything at all. What it does do though is it leaves an open wound that will never heal. That leaves you open ot a host of many diseases that would normally simply pass through your system when the mucous lining your lungs would entrap and expel it
I would think we're eventually and probably looking at the same thing here.
You may be able to do it and get away with it and have good results, many or a few times. The potential for it to create asbestosis like conditions though is probable.
In the case of corals now, to take it one step further, I'd never even consider this.
Since most corals are covered or coated with a very thin membrane the potential here for outright disasterous effects far outweight the benefits IMO.
I think the 'concept' though is good and could lead to further use of this as a treament of sorts. Good thinking!!!