Unfortunately, the bulk of protein study centers around its efficacy (or usefulness), not harmful side effects. That said, excess protein (beyond what the body needs to build muscle) is broken down in the kidneys to become glycogen. Drinking plenty of water facilitates this process and makes your kidneys happy. However, if your kidneys are not functioning normally, an excess of protein can be dangerous for you.
Now, based on a Consumer Reports study on available protein powders there are other harmful chemicals that are present in higher densities than they would be in naturally occurring food. These are things like cadmium, arsenic, etc. The numbers in the chart represent the load of the chemicals in 3 servings of the protein. The protein maker's response calls the study into question saying that the CR report had an agenda.
All that said, there are a couple reasons for not building more muscle:
- You did not do enough work to cause the body to adapt (see Practical Programming by Rippetoe and Dr. Kilgore [book])
- The body's adaptive systems did not have the resources required to hyper-compensate. (see same resource)
Your trainer believes that the problem you are facing is the second bullet point. In essence your body needs sufficient protein, calories and rest in order to build the muscle required to do more work.
Underweight (by weightlifting standards) lifters will constantly run into this problem. Protein powders are simply one way to get that extra protein and in many cases calories. Another way is the "Gallon of Milk a Day" (GOMAD) approach which will have the same effect for probably less money and fewer risks of having too much of the disagreeable heavy metals found in the CR report. NOTE: if you do GOMAD, don't do it for longer than 8 weeks at a time. You will also retain water, which will go away after you start drinking a gallon of water a day instead of the milk.