if eugenics were allowed, most parents would have their babies with Stephen Hawking's intellect, Brangelina's looks, etc and soon enough, earth is populated by clones; which is highly detrimental to the species' long-term survival.
We can't weed out (too many) genes from our genome, or we harm diversity.
Also, there'd always be one generation left behind: if all new babies grow up to be as efficient as Bashir, what role in society would the previous generation be left to fulfil?
I think it's Earth - not just Starfleet - that has issues with genetically enhanced people. Which isn't to say that Starfleet doesn't have issues as well, but I think in this case it is humans as a whole affecting Starfleet policy, not the other way around.
The Eugenics Wars must have been extremely traumatic, because yes, I've also noticed how un-Fed-like it is, to have a blanket prohibition on a whole class of people like that.
A real life example - Nazi use of Eugenic theory to back up their ideology of hatred meant that many people could not accept Darwins theory of evolution for a couple of decades. Thankfully people like Dawkins have rescued the theory from the extremists. I assume a similar situation in the Star Trek universe.
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