Yes, this is absolutely true. Fishing with explosives or "blast fishing" is actually both so efficient, particularly in small lakes and ponds, and also environmentally damaging that it's specifically banned in many places. Besides wrecking the ecosystem, it's very wasteful, since only a small amount of the dead or stunned fish float to the surface, while the rest sink to the bottom. However, in a pond or lake abundant with fish, the catch can nevertheless be considerable.

Soldiers have probably used hand grenades for blast fishing since they had access to hand grenades. The practice is apparently mentioned in the famous First World War book by Ernst Junger, Storm of Steel, though I've misplaced my copy and can't check whether this is true.

There are also numerous references to the practice in the memoirs of Finnish soldiers of the Second World War. Finnish troops spent quite a bit of time in the wilderness north of Lake Ladoga, and supplementing their diet with fish when possible was encouraged - although it seems that grenade fishing was usually frowned upon. Nevertheless, the practice is mentioned as a possibility in post-war survival manuals, for example the Finnish army's 1986 guide to foods available in nature (Luonnonmuonaopas). I would be very surprised if soldiers from other countries didn't use similar methods to enliven their fare as well.