Here's a couple products that wound up becoming associated with death and disease - I'm not in advertising, but I think that's probably not a good way to boost sales.
First is the the Atomic Energy Lab which contained real radioactive chemicals! I remember a skit on Saturday Night Live where Dan Akroyd played a sleezy toy salesman who sold products like "Bag O' Glass" and "Johnny Switchblade", but this is even worse! Notice the box actually says: "Safe Radioactive Chemicals". According to Environmental Graffiti:
The Atomic Energy Lab first went on sale in 1951 and featured low levels of genuine radioactive material for children to experiment with. It remained on sale until the late 1970’s and although the materials were labeled as ‘safe’ you wouldn’t find many parents today willing to let their kids play with uranium ore.
The fascinating post at Environmental Graffiti also lists a wide range of other products (like face cream) which contained radioactive elements.
Next, is a product which suffered from the most unfortunate name in history - the Ayds Diet Pill. This was their sales pitch:
"Why take diet pills when you can enjoy Ayds?"
I feel sorry for the company - they were actually around a long time before the disease struck, so this was obviously not their fault. The product was actually pretty successful - during its heyday a lot of celebs were telling you to get Ayds including : Bob Hope's wife, Alan Ladd's wife, Yvonne DeCarlo, Zza Zza Gabor, Mamie Van Doren, and here's Hedy Lamarr.
From the ad: "If I find myself putting on weight, the first thing I do is turn to Ayds."
Not surprisingly, the linkage to AIDS was ultimately impossible to overcome and the company went out of business - although there is no clear date reported as to when it was officially taken off of the market.
Here's a link to a YouTube clip for the product. The British TV commercial (found here) ends with the tag line "Thank goodness for Ayds!"