That's somewhat untrue. You don't need germ theory to grasp the concept of contagion, and there are primary sources where the idea of using possessions of smallpox victims to spread contagion was suggested. It's pretty dubious that it was ever carried out or would have been effective (hence the myth of smallpox blankets), but it's not as if people were stupid and unable to grasp that disease was somehow associated with the sick or their possessions.