I've heard that too, but I don't see how it can cause infections. Irritation, I can see, though... but what do I know.
Some shampoos are probably safer than others, but many of them have chemicals for the purpose of acting on hair shafts, so they may not be all that good for your skin. A natural shampoo or baby shampoo would probably be safer.
I read somewhere that someone did their laundry with shampoo. (It might have been here, but I'm not going to quit this post to go look it up. :) )