I always thought the genetic modification ban was pretty flimsy. It wasn't even established until DS9 since TNG had the Darwin Research Station.
I really don't like how strict they made it in SNW. Why should humans dictate the laws for all races in the Federation? What happened to the Denobulans? Phlox said that they genetically modify themselves.
DS9 said that genetic modification was still allowed for the treatment of serious illnesses. So it doesn't make sense for all permanent genetic modification to be banned.
Also, in DS9, genetic modification was more like performance enhancing drugs. Bashir's modifications gave him an unfair advantage over other people. It's kind of like someone cheating to get into a good school. But that argument also has problems since there are aliens with naturally superior abilities compared to humans. Vulcans have perfect memory, superior physical abilities, and telepathy, they would have a big advantage over humans in a lot of things. But Vulcans aren't banned from Starfleet.
TNG overall never said anything about the Federation or Starfleet being against genetic modification. It wasn't just Darwin Research Station. They didn't say anything about it in "Masterpiece Society" either.
Dr. Bashir I Presume was the first episode that any kind of ban was ever brought up. They didn't even say anything about a ban in "Space Seed" or "Wrath of Khan."
Also, when Torres was pregnant in Voyager, she wanted the Doctor to modify her baby to remove Klingon traits and no one said it was illegal.