Wow...this is how rumors start...
If creatine made you pee blood, then so would eating meat...
If you have a pre-existing kidney or organ issue, then yes, ANYTHING can cause a problem. So always check with your doctor.
If you can get all of your protein from food, then you don't need powder. But if you can't, powder becomes needed, especially if you are training and practicing hard.
Best brands are ProtoWhey & Beverly Nutrition. Muscle Milk is solid as well.
All proteins are legal. However, back in the day there were some rumors (which are pretty much true) that first runs of some proteins, such as Met-Rx, were spiked with illegal substances.
But you are not going to find that today with large brands such as MuscleMilk, Beverly, etc.