Perhaps.
But some fear is understandable. How can the Federation afford to risk another Khan?
And in that DS9 ep, Worf had a perfectly valid point. If genetic enhancement is allowed...it runs the risk of becoming mandatory.
Gattaca, for example. In it, genetic engineering is so widespread that normal humans are left out of pretty much everything. Mundanes have no rights to speak of, and no chance at making anything of their lives. Why should the Federation allow THAT?
Simple solution:
Create an environment where discrimination against others or prohibition to make a life for themselves whether they have genetic augmentations or not are not encouraged (aka, there is nothing to gain by discriminating against them).
For this, you need to get rid of competition... or competitive like environment.
If you get rid of this model and create a society which is mostly cooperative and in which there is nothing to gain to discriminate against others or gain power, then it shouldn't matter to ANYONE whether a person is genetically modified and enhanced or not.
Obviously you don't have to get rid of competition entirely, as it can still be used for fun and to potentially push oneself (if for an individual its a motivational tool - for many, competitive behavior detracts from the ability to improve ourselves and instead many of us thrive in a cooperative environment instead).
Gattaca is set in exactly the same socio-economic system that we basically have today where competitive behavior is encouraged and allows for discrimination of the kind you described to thrive.
I was actually under the impression the Federation ABOLISHED a competitive type system when it comes to contributing to society in favour of a cooperative model (heck, the very premise of the Federation is reliant on the notion of free exchange of resources, knowledge, science and technology for the purpose of cooperation and providing everyone with the needed opportunities to work in positions they wish to work in - its not a 'competition' based system, or at least, it doesn't make sense it would be).
Sure, non augmented individuals in that case may have to work harder at that to keep up with their peers in some situation, but a society like that would need to have safeties in place to ensure that everyone (regardless of their backgrounds) can work at their own pace.
Also, why should genetic engineering be restricted to being done to people in utero?
Modifications like that can be done on children, adults, etc. in Trek... nothing says you can't do the same thing to existing/mature people in real life (heck, people already do that).
So even if a person didn't get any genetic augmentations done, nothing says they couldn't elect to go through the procedure later in life if they wish to do so (with an option to reverse it and return to 'baseline' if they so desire - aka, non-augmented).