No, TONS of people keep their bettas with sand. There are any number of reasons that that fish could have died. I'm quite certain that they did not open the fish up to check for a blockage before attributing the death of a fish to something beyond their control.
Before putting sand in a tank it is a good idea to wash it. If you wash it thoroughly enough then it will not cloud the water. Cloudiness is not the end of the world though, just annoying until it clears.
Most sand is made of quartz, and quartz is silica.
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