Agreed, Jkrah, that marketing gimmicks often give the illusion of environmental conscientiousness. A perfect example is the label "green," which people now attach to literally anything they want to sell, from lightbulbs to laundry detergent. And I fear the gimmicks of the green revolution are just beginning.
Before anyone agrees with anything I said, perhaps someone ought to do a little more research than I did (which was none whatsoever). I was only taking issue with the idea that water soluble toxins would be used in fishing clothing. I misread your initial post, Jkrah - I thought you were implying that Permethrin was used in wading boots and laces to kill off undesirable organisms before they were transported from stream to stream. I didn't realize it was just an insecticide and you were just making a comparison of "greenness" with a totally different product Simms offers (the felt-less boots). My apologies for that knee-jerk response with 0% facts and 100% conjecture - I didn't really know what you were talking about, much less what I was talking about.
I've since read up a little on Permethrin. Permethrin is a synthetic insecticide similar to DDT that additionally tends to harm many cold-blooded species by blocking sodium receptors (it's a neurotoxin, like many other pesticides). While toxicity in humans is low and it is often used to treat lice and ticks, it's a suspected carcinogen (like virtually everything synthetic, I suppose). It has a low solubility in water, about 0.2 mg/L, but that's enough to make it wash out of clothing after several wash cycles. Toxic levels to fish are typically somewhere between 1 ppb and 1 ppm - it's VERY toxic to fish. 0.2 mg/L corresponds, if my calculations are correct, to about 10 ppb. So a saturated solution of Permithrin COULD have a toxic effect on a fish, but probably only to certain species and only with its direct exposure to a nearly saturated solution (possibly, I suppose, by smearing the fish with your soaked shirt prior to release?). I'd still say the chances of harming a single fish would be unlikely, but not completely out of the realm of reason.
What's a much more likely cause of fish exposure is Permethrin's widespread use by farmers to kill insects on food crops. Even though Permethrin breaks down quickly in water, the levels present in runoff from fields could potentially, I suppose, reach high (and sustained) levels for long enough not only to impact A fish but an entire stream. Permethrin has been measured in streams due to such run-off, and aquatic insect populations have been shown to suffer immediately following streamside sprayings, but large-scale fish kills haven't been observed (from what I've read).
Perhaps THIS should have been my first response. My apologies to all for my initial, ignorant, post. Hope this is a little more helpful to the discussion.
-Shawn