Except the Federation is very much not equal. There's plenty of genetic variation within species and a much larger variation between species. Vulcans live hundreds of years and have telepathy, humans die after just one hundred and are brain-blind. Bashir was born with severe genetic defects. Geordi was blind, and then he could see better than baseline. There are differences in fundamental capabilities everywhere.
Genetic engineering would allow those advantages to be shared by everyone. It annoys me how hypocritical the Federation is about this issue.