The Federation has all sorts of abusable technology. It makes no sense that they should only be paranoid about genetic engineering, and the flip side also makes no sense, that even in legitimate medical cases, it would be banned.
It has to be a culturally based phobia because of the Eugenics Wars. Which means that alien cultures are being subjected to an Earth based phobia. I can't imagine they're too happy about it. Probably a lot of them ignore it, which is why Julian was genetically engineered by aliens.
I think a lot of stuff doesn't stand up to scrutiny, which causes more questions to be asked. About 20 years ago, I started thinking hard about the prime directive, and how unenforceable it seems to be. Even if it only pertains to Starfleet, not civilians or alien civilizations, then you'd still get contamination of new cultures by those folks, either do-gooders or exploiters. And if Starfleet is used to blockade all these primitive worlds, they wouldn't have any ships left to do anything else.
So I came up with an antiTrek notion based on the perversion of the prime directive that seems a lot more human (the bad way) to me. You have a hands-off mandate for primitive worlds, but it is basically just a paper law because everybody KNOWS it is unenforceable. You post token sentry forces at the outskirts of systems using ships that would otherwise be mothballed, but while that is a token deterrent, it wouldn't stop well-planned, well-financed incursions. That way, corporations and such can go sneak in and do whatever, while the official position is that the government is not culture shocking these folks. This could extend to letting planets genocide themselves, with the twisted notion that once they are gone, you've got a new place to colonize (once the germs or fallout go 'way.)
I actually kind of like that Trek doesn't delve too deeply, because it lets me come up with alternatives that work better dramatically, and ones that would play havoc with the established too-niceness of most parts of the trekverse. Could be that some of this same mindset influence the ds9 storytelling and led to wonderful grace notes like Section 31.
The Reeves-Stevens postulated that Trek's anti-thinkingmachine ethic came from past technogoofs in MEMORY PRIME, and that conscious or thinking computers were something that only saw limited use (I think it was not public knowledge in that book either.)