Contaminated, foul tasting meat should still be consumable by starving dwarves. Nausea and disease would follow as appropriate
Quite simply, tainted meat could just be treated as rotten.
Starving dwarfs eating rotten meat would get sick, but no longer be starving (unless they are Moroccan, then the rotten meat is all good... or as some charitably put it, "preserved in its own fat". Where you draw the line on 'rotten meat' is culturally dependent).
Though killing the animal is still instant, the butchery task turning the carcass into usable meat should take some time, adjusted by skill. Additionally, the skill modifier could adjust how much meat is gained from a carcass - poor skill loses out on meat (mangling the corpse), high skill gets maximum meat. It would make the skill actually mean something, and be far more realistic.
As far as killing goes, I don't know anyone who has screwed up a slaughter so badly the animal injured them (with the exception of one city girl who, on her first time, tried to turn away and not watch). Domesticated animals usually stand or sit there complacently as you smack them on the head with a hammer. A frontier dwarf wouldnt have a problem.