Yes, sulfur is non toxic and very effective at controlling the itching and repelling horse lice, body lice and other mites.
But that said, I would not recommend delousing your entire camp with sulfur.
I would recommend getting out of there and once back home clean up everything immediately, using acceptable means and then and only then return to the great outdoors at a later time.
Here's the thing. I am a pesticide applicator and according to the law, you could be in serious trouble if this was done on provincial lands, especially if any damage was caused by such actions.
Here is what my course book has to say about sulfur:
Sulphur is an element long used as a combination fungicide-miticide-insecticide, available in a variety of formulas for the control of a wide range of plant diseases. May injure plants in hot, dry weather. It is phytotoxic to certain sulphur-sensitive plants such as pears, apricots, raspberries and cucurbits. Relatively non toxic to humans, animals and bees, but may be irritating to the eyes and skin. - Handbook For Pesticide Applicators and Dispensers (Page 95).
What you are suggesting is against the law in Canada. Only authorized persons can do it in the forests and they are usually government personnel.
Applying pesticide in any form, whether a natural element or not, is not permitted in the forest lands of Canada. I would think most countries have similar laws in place.