There are numerous references to the launching of dead (I hope!) plague victims into besieged cities from the time of Justinian through the Renaissance, which turned out to be a pretty effective tactic. So I wouldn't put an attempt to spread disease by blankets beyond the conception of these folks, but I would challenge that it worked.
I have to go with sarasmom here on two accounts - first, that we're attempting to judge 17th-century people by 21st-century moral codes, and second, while we try to do better our actual success in that regard is spotty at best. Would the various tribes have nuked Jamestown or Boonesborough if they could in order to settle a nasty, genocidal war? Would the settlers have nuked Indian villages for the same purpose? It's only hypothetical, but based on the real actions of both parties, I'd have to suggest that they would have. Would we nuke a city to settle a nasty, genocidal war? Two? Hmm...