Is it safe to run the fireplace like this, or should I put vermiculite
back
in it?
I haven't used gas logs, but I have heard that other people have had the
same problem. They have replaced the vermiculite with gasoline-soaked rags.
The rags look much better, though they have to be resoaked each time which
is probably why the manufacturer didn't use them in the first place.
Good luck.

(Gosh I hope you are a troll! If not, please stay away from anything sharp,
hot, or heavy.)