Random paper extracts:
"The antimicrobial activity of the silver ions was first identified in the 19th century, and colloidal silver was accepted by the US Food and Drug Administration (FDA) as being effective for wound management in the 1920s.2,3 However, after the introduction of penicillin in the 1940s, antibiotics became the standard treatment for bacterial infections and the use of silver diminished.""
https://academic.oup.com/jac/article/59/4/587/677868

Silver nanoparticles can be used as antibiotics against multidrug-resistant bacteria 2009,2010
http://www.sciencedirect.com/science/article/pii/S0734975008000918
https://link.springer.com/article/10.1007/s11274-009-0211-3

Probably not toxic short term, more research needed 2014
http://www.sciencedirect.com/science/article/pii/S1549963413003353
http://www.sciencedirect.com/science/article/pii/S0273230013001864:

https://books.google.com/ngrams/graph?content=silver+nanoparticles&year_start=1900&year_end=2020&corpus=15&smoothing=3&share=&direct_url=t1%3B%2Csilver%20nanoparticles%3B%2Cc0

Conclusion:
It was used cause it worked, better drugs came along, and now that we can make silver nanoparticles, usage might start returning soon.
It's probably not toxic, and worst case it's "most of cosmetic concern" https://academic.oup.com/femsre/article/27/2-3/341/615473

But just random off the shelf shit isn't any better than current antibiotics.