You're right, built-up fabric softener residue on fabric is flammable.
Unfortunately the common flame retardant PBDE itself is so hazardous that California and Washington state and Canadian legislatures have been moving to ban its use in many applications. It will be awhile before it's not widely used, however. And it's already present in women's breast milk around the world. (Here are just a couple of sane articles on the subject: http://news.discovery.com/human/flame-retardants-infertil..., and http://www.iaff.org/Canada/Updates/IAFF_PBDE_02112007.htm ).
Fabric softeners (but reportedly not Shaklee brand) also contain an astounding list of hazardous chemicals:
Alpha-Terpineol
Causes CNS (central nervous system) disorders... "highly irritating to mucous membranes" ..."Aspiration into the lungs can produce pneumonitis or even fatal edema." Can also cause "excitement, ataxia (loss of muscular coordination), hypothermia, CNS and respiratory depression, and headache." "Prevent repeated or prolonged skin contact."
Benzyl Acetate
Carconigenic (linked to pancreatic cancer). "From vapors: irritating to eyes and respiratory passages, exciting cough." "In mice: hyperanemia of the lungs." "Can be absorbed through the skin causing systemic effects." "Do not flush to sewer."
Benzyl Alcohol
Causes CNS disorders ..."irritating to the upper respiratory tract" ..."headache, nausea, vomiting, dizziness, drop in blood pressure, CNS depression, and death in severe cases due to respiratory failure."
Camphor
Causes CNS disorders. On EPA's Hazardous Waste list. Symptoms: "local irritant and CNS stimulant" ..."readily absorbed through body tissues" ..."irritation of eyes, nose, and throat" ..."dizziness, confusion, nausea, twitching muscles and convulsions". "Avoid inhalation of vapors."
Chloroform
Neurotoxic. Anesthetic. Carcinogenic. on EPA's Hazardous Waste list. "Avoid contact with eyes, skin, clothing. Do not breathe vapors ...Inhalation of vapors may cause headache, nausea, vomiting, dizziness, drowsiness, irritation of respiratory tract and loss of consciousness." "Inhalation can be fatal." "Chronic effects of overexposure may include kidney and/or liver damage." "Medical conditions generally aggravated by exposure: kidney disorders, liver disorders, heart disorders, skin disorders." "Conditions to avoid: Heat..." Listed on California's Proposition 65.
Ethyl Acetate
Narcotic. On EPA's Hazardous Waste list. "...Irritating to the eyes and respiratory tract" ..."may cause headache and narcosis (stupor)" ..."may cause anemia with leukocytosis and damage to liver and kidneys". "Wash thoroughly after handling."
Limonene
Carcinogenic. "Prevent its contact with skin or eyes because it is an irritant and sensitizer." "Always wash thoroughly after using this material and before eating, drinking ...applying cosmetics. Do not inhale limonene vapor."
Linalool
Narcotic. Causes CNS disorders. ..."respiratory disturbances" ..."Attracts bees." "In animal tests: ataxic gait, reduced spontaneous motor activity and depression ...depressed heart activity ...development of respiratory disturbances leading to death."
Pentane
"Danger - Harmful if inhaled ...Avoid breathing vapor." "Inhalation of vapors may cause headache, nausea, vomiting, dizziness, drowsiness, irritation of respiratory tract and loss of consciousness. Repeated inhalation of vapors may cause CNS depression. Contact can cause eye irritation. Prolonged exposure may cause dermatitis (skin rash)."
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I become very ill (breathing difficulty, headache, nervousness, confusion, sleep disorders) when exposed to fabric softeners wafting off people's clothing. This is a huge problem, obviously. For years now, I've used vinegar in my final rinse, and/or stopped the dryer while clothes are still barely damp and hung them for a few minutes. My clothes smell wonderful – just plain clean!