I'm preety sure the answer is no but I see it used on many edibles . .chocate for instance .. do we just insure no one eats these after using luster dust or any of the other dusts?

It depends on what country you live in if it's edible or not. Here in the US they say no but lots of people eat it anyway. I know that my kids eat it on candy and stuff, it's really not much that they're consumig so I don't worry about it.

I've heard it explained like this...

Its not approved by the FDA as being "food". But it is non-toxic, same as when your toddler eats a crayon. Not really food, but won't make anybody sick either.