Cowfishes natural diet is more or less the same as their close relatives, puffers. They need to feed a nice diverse diet just like puffers, clams, silversides, squid, shrimp, scallops, etc. Be sure to soak their food in a vitamin supplements as well. They eat a surprising amount of greens too, so if you can get him to occasionally nip at nori on a clip, great.
They do get rather large, rather quickly, nearly a foot. I am not positive on the toxin being 'releasable.' I suspect at least half of the cases were simply the cowfish died (their poor survival rate does hold true tho) and it's a large fish rotting a tank, which can quickly start showing effects, regardless of what large fish dies. That said, I wouldn't have one in a tank without a healthy amount of carbon running all the time.